January 2024

India Strategy | Earnings drought ending, finally!

`
India Strategy

On a roll!
Gautam Duggad - Research Analyst (Gautam.Duggad@MotilalOswal.com)
Investors are advised to refer through important disclosures made at the last page of the Research Report.
April 2021 1
Motilal Oswal research is available on www.motilaloswal.com/Institutional-Equities, Bloomberg, Thomson Reuters, Factset and S&P Capital.
 Content: On a roll!

01 02 03
Page #3-7 Page #8-9 Page #11-12
Summary Corporate earnings at a glance: Indian markets scale all-time highs
BFSI and Auto to drive earnings
growth

04 05 06
Page #13-25 Page #26-39 Page #40-256
Auto and BFSI in charge while MOFSL Universe: 3QFY24 Highlights Sector & Companies Preview
broader markets’ contributions to & Ready Reckoner
improve in 3QFY24E!

AUTOMOBILES – Pg40 CAPITAL GOODS - Pg57 CEMENT – Pg67 CHEM. SPECIALTY – Pg77 CONSUMER – Pg88
Gross margin to contract Order inflow momentum Moderate volume No visible indications of Steady demand trend;
sequentially as RM prices continued during 3QFY24 growth; price hikes, and demand resurgence operating print looks
inch up low costs drive OPM healthy

EMS – Pg103 FIN. BANKS – Pg108 NBFC – Pg127 NON LENDING – Pg141 HEALTHCARE – Pg151
Strong revenue growth to Earnings growth to Healthy profitability Capital markets-linked Operational performance
continue; margin under moderate; remain despite NIM restraint companies to deliver to decelerate further
pressure watchful on NIMs from rising CoF strong performance

INFRA - Pg167 LOGISTICS – Pg172 METALS - Pg178 OIL & GAS - Pg189 REAL ESTATE – Pg203
Order book healthy; Logistics activity picks up Weak exports, festive Refining and marketing New launches to drive
execution to improve as festive demand kicks season, and elevated raw margins to contract QoQ sales; DLF, GPL and PEPL
marginally in material prices to impact to lead the pack
performance

RETAIL – Pg212 TECHNOLOGY - Pg225 TELECOM - Pg237 OTHERS - Pg244

Demand environment Furloughs: A headwind Moderate growth with
likely to remain soft over and above adverse elevated capex
macros
 India Strategy | 3QFY24On a roll!
Preview
Mastering the game!
India Strategy
BSE Sensex: 72,026 Nifty 50: 21,711

On a roll!
Domestic Cyclicals to drive earnings amidst benign macros!

Best among the Rest

 Rewind and relive the magic: India ended the eventful CY23 on a high note, with
the Nifty delivering 20% returns, marking the eighth consecutive year of a positive
close. The expectations of the peaking of rate hike cycle, moderating inflation,
improving liquidity, and consistently rising retail participation in equities, along
with strong corporate earnings, drove this performance. The resounding victory of
BJP in the three key state elections in Dec’23 added to the positive sentiments as
it further strengthened the expectation of political continuity after the 2024
General Elections in Apr/May’24. Even over the long term, India continues to be
one of the top-performing markets with a 3-/5-/10-year return CAGR of 16%/
15%/13% (in local currency terms) and a CAGR of 11%/11%/10% (in USD terms).
 Sharp outperformance by mid/small-caps: The highlight of CY23 for Indian
markets was the sharp outperformance of mid- and small-cap stocks. The Nifty
Midcap 100 (up 47% YoY) and the Nifty Smallcap 100 index (up 56% YoY)
outperformed the Nifty by a wide margin in CY23. Even as FII flows turned around
in CY23 (USD21b of inflows in CY23 vs. USD17b of outflows in CY22), the domestic
flows remained resilient with USD22b of inflows (+USD32b in CY22) amidst hectic
primary and secondary market activities.

Three important ponderables

PAT growth for the MOFSL  As the 3QFY24 earnings season is set to begin, we see three important factors that
Universe (YoY %) will dominate investor conversations: 1) Rate cuts: The series of rate hikes by
global central banks to combat inflation over the last two years is expected to
PAT growth YoY (%)
have reached its peak. The US FED has maintained the benchmark rates for the
51.1
46.2 third consecutive time, so the likelihood of a rate cut remains high in 1HCY24. This
could boost liquidity, as demonstrated by the surge in global equity markets
during Nov-Dec’23, and the moderation in the US 10-year yields from their multi-
15.3 19.7 year highs. However, the quantum and timing of the same will be keenly
monitored. 2) Political continuity: The recent outcome of the state elections in
four states boosted the market confidence for an unprecedented third
consecutive term for the current administration after the 2024 General
Jun-23

Sep-23

Dec-23E
Mar-23

Elections. This could keep the equity market multiples elevated in the near term
as political continuity could augur well for policy momentum and reforms. 3)
Institutional Flows: DII + FII flows in CY23 stood at USD44b, the highest ever in a
calendar year. Growing equity culture (rising SIP contributions and new demat
accounts) in allocation of retail savings post-pandemic has moderated the market
volatility. India's solid macroeconomic fundamentals in the context of weak
global growth as well as prospects of another year of healthy corporate earnings
should keep the flows resilient, in our view.

January 2024 3
 On a roll!
Mastering the game!

MOFSL/Nifty earnings expected to grow 20%/10% YoY in 3QFY24

We estimate MOFSL’s earnings to grow 20% YoY, while the Nifty earnings are likely
to grow 10% YoY in 3QFY24. MOFSL’s earnings benefit from the low base (2%
growth) in 3QFY23. EBITDA margin (ex-Financials) is likely to expand 160bp/50bp to
16.1%/19.5% for MOFSL Universe/Nifty. Overall earnings growth is anticipated to be
driven once again by domestic Cyclicals, such as Auto and BFSI, which are expected
to post 35% and 17% YoY growth; while, key sectors such as Cement, Capital goods,
Metals, and Healthcare would report a healthy 98%, 32%, 25%, and 20% YoY
growth, respectively. However, Technology is anticipated to report its first YoY
earnings decline of 2% in 26 quarters. We have cut our FY24E Nifty EPS marginally
by ~2% to INR976 while FY25 Nifty EPS is stable at INR1,142. We now forecast the
Nifty EPS to grow 21%/17% in FY24/FY25.

The year of a broad-based growth!

 CY23 witnessed broad-based growth with all indices and sectors delivering
Mid- and small-cap outperform
Nifty-50 by a wide margin in CY23 positive returns. Both the Nifty Midcap 100 (+47% YoY) and Nifty Smallcap 100
Nifty50
(+56% YoY) outperformed the Nifty-50 by a wide margin of 27% and 36%,
Nifty Midcap 100 respectively. On a five-year basis, Nifty-50/Nifty Midcap100/ Nifty Smallcap100
Nifty Smallcap 100
56% reported a CAGR 15%/21%/19%.
47%  The recovery of the underperforming sectors from the past decade, such as Real
Estate, Capital Goods, PSUs, Industrials, Defense, etc., led the rally. The top
gainers in the sectoral space were: Real Estate (+81%), Capital Goods (+67%), Auto
20% 21% 19% (+48%), Infra (+39%), Healthcare (+34%), Utilities (+33%), PSU Bank (+32%),
15%
Energy (+29%), FMCG (+29%), Technology (+24%) & Metals (+19%).
YoY 5yr CAGR  The Nifty-50 delivered a 30% earnings growth in 1HFY24. High-frequency data
indicates that earnings momentum will continue to remain intact in 2HFY24. The
sectors that underperformed on the earnings front for the past several years,
such as Automobiles, Real Estate, Capital Goods, Infrastructure, Industrials,
Utilities, Hotels, and PSUs have also made a strong comeback.

No dark clouds on the horizon?

The current market context looks ideal with all factors viz. macro, earnings, rates,
liquidity, inflation, policy momentum looking picture perfect. This is off-course ably
complimented by flows (discussed above). We remain firm believers in the medium-
term India story and expect these trends to strengthen with multiple themes at play
(financialization of savings, private capex revival, rising discretionary consumption,
strengthening of real estate cycle, and the massive creation of digital and physical
infrastructure). That being said, we believe the journey will not be linear and will be
interspersed with regular bouts of volatility as valuations are full, and any adverse
change in the current benign liquidity backdrop or geopolitical situation can result in
episodes of sharp corrections. Thus, our model portfolio construction is centered
around participation growth visibility with a focus on domestic cyclicals having
reasonable valuations.

January 2024 4
 On a roll!
Mastering the game!

Earnings highlights – 3QFY24E | BFSI and Auto would continue to lead,

while contributions from Cement, Capital Goods, and Metals to improve
 We predict MOFSL earnings to jump 20% YoY, while Nifty earnings are likely to
grow 10% YoY in 3QFY24. Excluding global commodities (i.e. Metals and O&G),
the MOFSL Universe and Nifty would post 19% and 9% YoY earnings growth.
 Overall earnings growth is projected to be driven once again by domestic
Cyclicals, such as BFSI and Auto, while O&G’s earnings are likely to surge 21% YoY
underpinned by strong marketing margins of the OMCs. BFSI’s earnings would be
mainly led by Private Banks and NBFC-lending with 23% and 27% YoY growth,
respectively. BFSI’s earnings are predicted to remain buoyant at 17% YoY;
however, its earnings would continue to moderate from the previous highs. Auto
sector’s earnings are expected to grow 35% YoY during the quarter. Ex-TAMO,
the Auto universe is likely to post 40% YoY earnings growth.
 Sales and EBITDA of MOFSL Universe are likely to grow 4% and 10%, while for
Nifty, we expect Sales and EBITDA to improve 6% and 7% YoY, respectively.
 The Cement sector is likely to report a strong 98% YoY earnings growth on a low
base. The sector is expected to report its second consecutive quarter of strong
earnings growth after posting an earnings decline for seven quarters.
 The Metals sector is likely to report a 25% YoY earnings growth over a weak
base of 3QFY23.
 Capital Goods and Healthcare would clock a strong earnings growth of 32% YoY
and 20% YoY, respectively. The Technology sector would report an earnings
decline of 2% (after 26 quarters of growth) mainly due to weak global macros.
 Specialty Chemicals too is expected to report an earnings decline of 23% YoY.
 EBITDA margin is projected to expand 160bp YoY for the MOFSL Universe (ex-
Financials) to 16.1%. On the other hand, EBITDA margin for Nifty-50, excluding
Financials, is likely to expand 50bp YoY to 19.5% during the quarter.
 MOFSL Midcap Universe is estimated to report a growth of 1%/12%/44% YoY in
Sales/EBITDA/PAT, while MOFSL Smallcap Universe is estimated to clock a
growth of 6%/27%/42% YoY in Sales/EBITDA/PAT in 3QFY24. The large-cap
companies are likely to register Sales/EBITDA/PAT growth of 4%/9%/16% YoY.
 Sales/EBITDA/PAT of the MOFSL Universe is expected to report a two-year CAGR
of 10%/ 9%/10% over Dec’21-Dec’23.
 FY24E earnings highlights: The MOFSL Universe is likely to post a sales/EBITDA/
PAT growth of 4%/21%/27% YoY. Banking, O&G and Auto are likely to be the key
growth sectors with 85%, 72% and 18% YoY earnings growth, respectively.
 Marginal change in Nifty EPS: We have cut our FY24E Nifty EPS marginally by
~2% to INR976 and while FY25E Nifty EPS is stable at INR1,142. We now forecast
the Nifty EPS to grow 21%/17% in FY24/FY25.
 Auto, Financials, and O&G are expected to account for 84% of the incremental
FY24E earnings growth for Nifty. Ex-BFSI, we project Nifty’s FY24 earnings to
grow at 22% YoY; while ex-Metals and O&G, Nifty’s FY24 earnings are
anticipated to grow 19% YoY.

MOFSL Top Ideas: Large-caps – SBI, L&T, ICICI Bank, TITAN, Coal India, M&M, ITC,
HCL Tech, ABB, Zomato. Mid-Caps: Indian Hotels, Godrej Properties, Metro Brands,
Angel one, Global Health, PNB Housing, Sobha, Lemon Tree Hotel, Kirloskar Oil,
IIFL Finance.

January 2024 5
 On a roll!
Mastering the game!

Model portfolio: Key changes

We have kept our sector views intact but made some important changes in the
portfolio to reflect our constructive views on domestic cyclicals. We remain OW on
Financials, Consumption, Industrials and Automobiles. We are adding weights in
Energy and Real Estate while remaining UW on Metals, Utilities and IT. We have also
made several additions from a bottom-up viewpoint across sectors.
 FINANCIALS: We reiterate our OW stance on Financials and remain significantly
OW on PSU Banks. Valuations in Banking are very reasonable after the recent
underperformance even as asset quality continues to remain healthy. We have
kept stocks and weights broadly unchanged in both Private and PSU Banks with
significant OW stance on PSU Banks. In NBFC- Lending, we are adding PNB
Housing as it has levers for NIM improvement through product diversification
and potential decline in borrowing costs. We expect PNBHF to deliver a CAGR of
14%/29% in Loan-book/PAT over FY23-FY26 and ~2.4%/13% RoA/RoE in FY26. It
is trading at 1.3x FY25E P/B. We are also introducing IIFL Finance, which trades
at 1.9x FY25E P/BV and can sustainably deliver an RoE of 20%+ in the medium
term with a PAT CAGR of 28% over FY23-FY26E and an RoA/RoE of ~4.1%/22%
by FY26E. In NBFC- Non-Lending, we are raising weights on Angel One given its
strong operational trends and reasonable valuations at 21.7x FY25 P/E with 26%
earnings CAGR over FY23-25E.
 INDUSTRIALS: We are raising weights in Industrials further and adding ABB and
Kirloskar Oil while continuing to hold L&T. We are adding ABB based on the
strong addressable market that is continuously growing and ABB’s ability to
improve its offerings across segments. Despite the near-term weakness in
inflows and margins, we expect the company to continue benefiting from its
strategy to penetrate across markets and geographies. We are adding KOEL
based on its enhanced product portfolio in powergen segment across CPCB 2,
CPCB 4+ and fuel agnostic engines as well as its strategy to grow the aftermarket
and exports over time. It is a potential re-rating candidate that will pan out as the
company increases its share of HHP sales and exports and improve margins over
time. In Cement, we are adding DALBHARA based on its long-term capacity
addition plans, its ambition to become a pan-India pure play cement company,
and cost saving strategies. We believe that completion of the JP Plant's
acquisition will help re-rating in valuation multiples. The stock trades at 11.5x/
9.5x FY25E/FY26E EV/EBITDA and EV/t of USD108/ USD102. We are also adding
APL Apollo Tubes in model portfolio given its reasonable valuations and our
expectations of ~45% earnings CAGR over FY23-25.
 CONSUMPTION: We continue to remain OW on Consumption with a significant
bias towards discretionary consumption names. We have marginally tinkered
with weights and added 100bp away from ITC to Titan. We are also adding
Restaurant Brands in our model portfolio given its reasonable valuation at 16x
FY25E EV/EBITDA after the recent underperformance. We continue to maintain
allocations in Avenue Supermart, Indian Hotels, Zomato, Lemontree Hotels &
Metro Brands.
 REAL ESTATE: We are adding weights in Real Estate. While we continue to hold
Godrej Property, we are introducing Sobha and Sunteck in our model portfolio.
We are adding Sobha as we believe it will outperform its peers on growth and
profitability through its healthy launch pipeline and recent pricing growth.
Moreover, it trades at a 25-40% discount to its peers. We believe Sunteck will
January 2024 6
 On a roll!
Mastering the game!

get into consistent growth trajectory with launch of the three new locations
over the next two years. Its healthy balance sheet, strong cash flows, and the
recent platform with IFC do provide a war-chest to be aggressive on new land
acquisitions.
 ENERGY: After a long time, we are adding weights in Energy given the
reasonable valuations still prevailing in the sector. We are adding GAIL and
HPCL. We like GAIL for its strong 9% transmission volume CAGR in FY23-26E and
likely turnaround in petchem division fundamentals. These we believe can drive
a 32% EBITDA CAGR in FY23-26. GAIL is trading at an FY25E P/E of 13x. We are
adding HPCL for its strong exposure to the profitable marketing business, which
is enjoying multi-year high margins with crude prices sustaining below
USD80/bbl. Refining margin environment too remains favorable with a tight
demand-supply situation, while valuation at 0.9x FY26F P/B is reasonable.
 AUTOMOBILES: We are replacing Bharat Forge with Hero Motors. Gradual rural
recovery and ongoing wedding period demand is further expected to drive the
growth momentum. We believe that the sustained growth in both the 100cc
and 110cc categories will benefit HMCL the most, as they contribute ~19% and
61% to HMCL’s overall volumes, respectively. HMCL is currently trading at a one-
year forward valuation of 18x, which is in line with its 10-year LPA while other
2W peers are trading at 20-25% premium to their respective LPAs.
 METALS: We are replacing Tata Steel with Coal India in Metals. We are adding
Coal India (part of the Top CY24 MOFSL Ideas) based on its robust growth in
production volumes driven by very strong end-use demand, elevated e-auction
premiums, and strong outlook on volume growth ahead as well as lucrative
valuations/dividend yield. There are possible chances of FSA price revisions that
could see further improvement in realization and earnings.

January 2024 7
 Corporate earnings at a glance: BFSI and Auto to drive earnings growth On a roll!
Mastering the game!
BFSI and Auto to boost the quarter; OMC’s earnings to spike; excluding Metals and O&G, profits would grow 19% and 9%
YoY for the MOFSL Universe and Nifty, respectively.
PAT expected to rise 20% YoY for PAT likely to rise 21% YoY for MOFSL PAT to jump 19% YoY for MOFSL
MOFSL Universe Universe, excluding Financials Universe, sans Metals and O&G
MOFSL Universe MOFSL Ex Financials MOFSL Ex Metals and O&G
94
229
143
75
108
55
97
49 51 46 37
35 58 34
23 18 14 15 20 41 47 54 29 32
21 27 23 22
2 17 8 3 5 21 19
13
-8
-24 -12

Dec-20

Jun-23
June-21
Sep-21

Jun-22
Sep-22

Sep-23
Mar-21

Dec-21
Mar-22

Dec-22
Mar-23

Dec-23E
June-21
Dec-20

Sep-21

Jun-22
Sep-22

Jun-23
Mar-21

Dec-21
Mar-22

Dec-22

Sep-23
Mar-23

Dec-23E

June-21
Sep-21

Sep-22

Sep-23
Jun-22

Jun-23
Dec-20
Mar-21

Dec-21
Mar-22

Dec-22
Mar-23

Dec-23E
PAT growth for the Nifty Universe PAT to grow 11% YoY for Nifty Universe, PAT to jump 9% YoY for Nifty Universe,
likely at 10% YoY sans Financials sans Metals and O&G
Nifty Universe Nifty Ex Financials Nifty Ex Metals and O&G
107
148
84 68
56
80 49

27 40 33 30 29
39 32 22 16 19 22 29
20 26 22 22 28 6 11 19 21 24
15 15 14
9 10 10 11 9
-3 -1
Jun-22

Sep-23
June-21
Sep-21

Sep-22

Jun-23

Dec-23E
Dec-20
Mar-21

Dec-21
Mar-22

Dec-22
Mar-23

Jun-23
June-21
Sep-21

Jun-22
Sep-22

Sep-23
Dec-23E
Dec-20
Mar-21

Dec-21
Mar-22

Dec-22
Mar-23

June-21
Dec-20

Sep-21

Jun-22

Jun-23
Mar-21

Dec-21

Sep-22

Sep-23
Mar-22

Dec-22
Mar-23

Dec-23E
Performance of the MOFSL Universe to be driven by Banks, O&G and Autos in 3QFY24E

26 22 18 15 13 9 7 6 3 3 3 1 1 1 0 2,360
79 71 49 36 34
1 2 6

1,972
3QFY23…

MOFSL 3QFY24E…
Telecom

Metals

Retail

NBFC - Non Lending

Media
Banks-PVT

Oil & Gas

NBFC - Lending

Healthcare
Cement

Real Estate

Others
Consumer

Chemicals-Spec
Auto

Insurance

Infra
Cap. Goods

EMS
Banks-PSU

Logistics

Technology
Staffing

MOFSL 3QFY24E
MOFSL 3QFY23
PAT (INRb)

PAT (INRb)
MOFSL

January 2024 8
 Corporate earnings at a glance: O&G’s contribution likely to moderate On a roll!
Mastering the game!
Financials’ contribution to see marginal gains and account for over one-third of the overall profit pool

BFSI PAT (INRb) BFSI contribution to MOFSL universe PAT (%)

37 36 35
33 32 33
30
26 26
22 23 22
19

350 351 333 426 506 558 505 641 716 808 814 852 836

Sep-22

Dec-23E
June-21

Sep-21

June-22

June-23

Sep-23
Dec-20

Mar-21

Dec-21

Mar-22

Dec-22

Mar-23
O&G’s PAT contribution to the MOFSL Universe would moderate in 3QFY24

O&G PAT (INRb) O&G contribution to MOFSL universe PAT (%)

24.9
24.4
21.5 21.6 20.9 21.3
20.4 20.3
18.8
17.1 17.3
15.7
14.6

296 393 301 385 418 449 244 276 337 528 630 624 408

Dec-23E
June-21

June-22

June-23
Dec-20

Sep-21

Dec-21

Sep-22

Dec-22

Sep-23
Mar-21

Mar-22

Mar-23

MOFSL (ex-OMC)’s PAT share (%): Domestic Cyclicals to drive earnings; while, Global Cyclicals to drag!

Defensives 21 21 21 21
24 28 28 29 28 30 26 22 26 23 23 25 23 21 22
36
52
Global cyclicals 24 27 25 25 24
34 26 36 36 37 37 24
26 28 25 32 40 39
37 25 -1

Domestic cyclicals 51 53 52 53 54 54
42 35 46 43 47 48 45 42 41 42 42 42
39 38 35
Sep-20
June-19

Sep-19

June-20

June-21

Sep-21

June-22

Sep-22

June-23

Sep-23

Dec-23E
Dec-18

Mar-19

Dec-19

Mar-20

Dec-20

Mar-21

Dec-21

Mar-22

Dec-22

Mar-23

January 2024 9
 On a roll!
Mastering the game!

MOFSL: MODEL PORTFOLIO

WEIGHT PAT YoY / CAGR (%)
SECTOR WEIGHT / BSE MOST EFFECTIVE SECTOR
RELATIVE TO
PORTFOLIO PICKS 100 WEIGHT STANCE FY24E FY25E FY26E FY23-FY25
BSE100
Financials 33.0 35.0 2.0 Overweight
Private Banks 24.2 20.0 -4.2 Underweight
ICICI Bank 6.0 8.0 2.0 Buy 25 14 17 20
HDFC Bank 11.0 7.0 -4.0 Buy 40 21 20 30
Axis Bank 2.8 3.0 0.2 Buy 10 25 22 17
AU Small Finance 0.3 2.0 1.7 Buy 18 32 38 25
PSU Bank 2.5 6.0 3.5 Overweight
SBI 2.1 4.0 1.9 Buy 13 28 17 20
Bank of Baroda 0.4 2.0 1.6 Buy 20 20 20 20
Diversified Financials 6.2 9.0 2.8 Overweight
Angel One 0.0 3.0 3.0 Buy 31 22 19 27
IIFL Finance 0.0 3.0 3.0 Buy 32 26 25 29
PNB Hsg Fin 0.0 3.0 3.0 Buy 46 20 22 32
Consumption / Retail 14.0 14.0 0.0 Neutral
ITC 3.6 4.0 0.4 Buy 8 13 9 11
Avenue Supermarts 0.5 3.0 2.5 Buy 12 37 33 24
Titan Company 1.3 3.0 1.7 Buy 22 22 23 22
Zomato 0.6 2.0 1.4 Buy LP 266 154 LP
Indian Hotels 0.3 2.0 1.7 Buy 18 18 10 18
Energy/Telecom 11.9 12.0 0.1 Neutral
Reliance Industries 7.7 6.0 -1.7 Buy 4 18 15 11
GAIL 0.4 2.0 1.6 Buy 57 0 28 26
HPCL 0.0 2.0 2.0 Neutral LP -28 -3 LP
Bharti Airtel 2.3 2.0 -0.3 Buy 50 50 21 50
Cap Goods, Infra &
Cement 8.7 12.0 3.3 Overweight
Larsen & Toubro 3.7 4.0 0.3 Buy 29 24 22 26
ABB India 0.0 2.0 2.0 Buy 75 21 19 46
APL Apollo 0.3 2.0 1.7 Buy 28 65 25 45
Dalmia Bharat 0.0 2.0 2.0 Buy 19 48 38 33
Godrej Properties 0.0 2.0 2.0 Buy 19 61 13 39
Technology 11.3 8.0 -3.3 Underweight
Infosys 4.7 5.0 0.3 Buy 3 14 17 8
HCL Technologies 1.3 3.0 1.7 Buy 4 14 12 9
Auto 6.8 7.0 0.2 Neutral
Mahindra & Mahindra 1.4 3.0 1.6 Buy 38 6 11 21
Hero Motors 0.4 2.0 1.6 Buy 37 8 12 22
Ashok Leyland 0.2 2.0 1.8 Buy 96 24 11 56
Healthcare 4.1 4.0 -0.1 Neutral
Cipla 0.6 2.0 1.4 Buy 26 12 8 19
Global Health 0.0 2.0 2.0 Buy 48 21 18 34
Metals / Utilities 6.1 2.0 -4.1 Underweight
Coal India 0.8 2.0 1.2 Buy -10 0 11 -5
Others 4.1 6.0 1.9 Overweight
Lemon Tree 0.0 1.0 1.0 Buy 9 106 16 50
Metro Brands 0.0 1.0 1.0 Buy 0 39 23 18
Kirloskar Oil Eng. 0.0 1.0 1.0 Buy 28 25 24 27
Sobha 0.0 1.0 1.0 Buy 49 154 105 94
Restaurant Brands 0.0 1.0 1.0 Buy Loss Loss LP Loss
Sunteck Realty 0.0 1.0 1.0 Buy 7985 93 46 1149
TOTAL 100 100 23 18 17 20
LP: Loss to Profit

January 2024 10
 On a roll!
Mastering the game!

MARKETS Indian markets scale all-time highs…

… with healthy institutional flows and strong retail participation!
 The Nifty-50 surpassed the milestone of 21k and BSE Sensex exceeded the 72k
mark and hit an all-time high in Dec’23. The Nifty-50 surged 20% YoY in CY23 (vs.
only 4% growth in CY22). Further, the Nifty-50 clocked eight successive years of
positive returns for the first time ever.
 Amid weak global macros, rising interest rates, and geopolitical uncertainties
that kept global markets volatile and jittery, Indian markets continue to
showcase its resilience and outperform other emerging markets handsomely.
 Most global economies end higher in CY23: Barring China (-14%), most of the
key global markets such as Brazil (+33%), Taiwan (+27%), Germany (+24%), US
S&P500 (+24%), France (+20%), Russia (+20%), Japan (+19%), India (+19%),
Korea (+16%), UK (+9%) and MSCI EM (+7%) gained in CY23 in USD terms. MSCI
India (+19%) outperformed MSCI EM (+7%) in CY23 as well.
 India’s outperformance moderates vs. global peers in CY23 as global markets
recover from their CY22 lows. Despite moderation, India remains the top
performer in local currency terms and one of the top three performers in USD
terms in the last 20 years. The Nifty-50 posted a CAGR of 16%/15%/13%/
14%/13% (in local currency terms) and a CAGR of 11%/11%/10%/10%/10% (in
USD terms) in the 3-yr/5-yr/10-yr/15-yr/20-yr periods.
 Broad-based outperformance!: The year witnessed a broad-based growth with
all indices and sectors delivering positive returns. Both the Nifty Midcap 100
(+47% YoY) and Nifty Smallcap 100 (+56% YoY) outperformed the benchmark by a
wide margin of 27% and 36%, respectively. The recovery of the underperforming
sectors from the past decade, such as Real Estate, Capital Goods, PSUs,
Industrials, Defense, etc. (despite not being a major contributor to the large-cap
indices), led the rally in the broader markets. This propelled the mid- and small-
cap indices to new highs.
 FII flows rebound while DII flows remain strong: FIIs turned net buyers with
inflows of USD21.4b in CY23 (vs. outflows of USD17b in CY22). Further, resilient
domestic inflows of USD22.3b in CY23 and monthly SIP inflows of ~USD2b
(scaling a new high), easily cushioned the major shocks caused by global
volatilities and various uncertainties in the past two years.
Exhibit 1: World equity indices in USD terms (%) Exhibit 2: World equity indices in local currency terms (%)
CY23 (USD term) (%) 47 CY23 (in local currency) (%)
33
27 24 24
20 20 19 28 27
19 16 24 22 20 20 19 17
9 7
7 4

-14 -14
S&P 500

South Korea

China (HSCEI)
France

Russia MICEX

India - Nifty

UK

MSCI EM
Brazil

Taiwan

Germany

Japan

South Korea

China (HSCEI)
Russia MICEX

S&P 500
Taiwan

India - Nifty

France

MSCI EM

UK
Japan

Brazil

Germany

January 2024 11
 On a roll!
Mastering the game!

Exhibit 3: FIIs flows turned positive in CY23… Exhibit 4: …while DIIs inflows continued to remain strong
FIIs (USDb) Net DII (USD b) 32.2
23.4
21.4
22.3
14.2
7.7 15.9
14.0
2.9 3.8 12.1

5.3 6.0

-4.6

-17.0 -5.0
CY16 CY17 CY18 CY19 CY20 CY21 CY22 CY23
CY16 CY17 CY18 CY19 CY20 CY21 CY22 CY23

Exhibit 5: FIIs net buyers, and inflows jumped in Dec’23 Exhibit 6: DII flows remained healthy in the last five months
Net FII (USD b) Net DII (USD b)

7.0
6.8

6.7

6.1
6.0
5.0
4.7

5.6
4.1

4.1

4.1

3.7
2.3
1.9

3.4
1.8

3.3
1.7

3.1

3.0
2.9
1.0
0.8

2.6

1.6
2.4
2.3
1.7

1.7
1.3

1.1

0.5
0.3
-0.2

-0.6
-1.6
-1.7

-2.3
-2.7

-0.3
-0.4
-3.7
-3.7
-3.8

-0.8
-0.9
-4.8

-4.9
Feb-22 -5.0

June-22 -6.3
Apr-22

Aug-22
Oct-22

Apr-23

Aug-23
Oct-23
Dec-21

Dec-22
Feb-23

June-23

Dec-23

Aug-22

Aug-23
Feb-22
Apr-22
June-22

Oct-22

Oct-23
Dec-21

Dec-22
Feb-23
Apr-23
June-23

Dec-23
Exhibit 7: Nifty Midcap and Nifty Smallcap indices outperformed Nifty-50 in CY23 (indices rebased to Nifty-50)
Nifty50 Nifty Midcap 100 Nifty Smallcap 100
33,000
31,233
CY23 performance
29,000 28,807
Nifty-50 up 20%, Midcap up 47%, Small cap index up 56%

25,000

21,000 21,731
18,105
17,000
Mar-23

May-23

Jul-23

Oct-23

Nov-23
Dec-22

Jan-23

Feb-23

Apr-23

Jun-23

Aug-23

Aug-23

Sep-23

Dec-23

Source: MOFSL

Exhibit 8: MoM performance (%) – mid-caps and small-caps outperformed large-caps in CY23
Nifty-50 Nifty Midcap-100 Nifty Smallcap-100 12
10
8 8 8 8
7
6 6 6 7 6
5 5 6
4 4 3 4 4 4
3 2
0

0 -1
-2 -2
-2 -2 -3 -2 -2 -2 -3 -3
-3 -4 -4
Jul-23

Aug-23
Dec-22

Feb-23

Mar-23

Apr-23

May-23

Sep-23

Oct-23
Jan-23

Jun-23

Nov-23

Dec-23

January 2024 12
 On a roll!
Mastering the game!

Auto and BFSI in charge while broader markets’ contributions

3QFY24 PREVIEW
to improve in 3QFY24E!
Earnings of Cement, Capital Goods, and Metals to improve, while that of
Technology to weaken
 Auto sector’s earnings are anticipated to surge 35% YoY during the quarter.
Excluding Tata Motors, the sector is still likely to clock 40% YoY growth. We
Expect BFSI and estimate margin expansion to continue for the seventh straight quarter YoY. We
Auto to lead the expect 160bp YoY expansion in EBITDA margin for our Auto OEM Universe (ex-
incremental profit JLR) driven by better gross margin, cost efficiencies and operating leverage. The
growth benefit of healthy growth in underlying industries coupled with cost efficiencies
in 3QFY24 should also result in strong earnings growth for our Ancillary coverage.
 BFSI’s earnings are expected to be strong once again and will be driven by
Private Banks (up 23%) and NBFC-Lending (up 27%) while PSBs will post flattish
earnings YoY (up 4%). This growth will be aided by healthy credit growth due to
the continued momentum in Retail and Business Banking, and recovery in the
corporate segment. The Home, Vehicle, Unsecured, and Small Business
Of the 17 major segments continue to do well, while unsecured loans are expected to witness
sectors under some moderation in growth amidst the RBI’s RWA regulation. We expect NIMs
MOFSL Coverage, to moderate further in 3QFY24. We estimate slippages to remain under control,
11 sectors to see while the recovery momentum remains healthy, thus driving continued
an expansion in improvement in asset quality ratios.
EBITDA margin YoY  O&G’s earnings to remain healthy in 3Q and the performance would largely be
fueled by YoY improvements in GRMs for OMCs, albeit, moderate sequentially.
The sector’s PAT should grow 21% YoY (decline 35% QoQ), whereas it would
increase 9% YoY and decline 5% QoQ (ex-OMCs). O&G (led by OMCs) would
drive 18% of the incremental YoY earnings growth for MOFSL Universe in
Sectoral PAT growth for the quarter-
ended Dec’23 (YoY %) 3QFY24E aided by the strong marketing margins of OMCs.
 Metals sector is expected to post an earnings growth of 25% YoY. Excluding
Cement 98
global commodities (Metals and O&G), the MOFSL Universe is anticipated to
EMS 45
Staffing 39
report a 19% earnings growth during the quarter.
NBFC - Non Lending 36  Technology sector would be impacted by a combination of adverse macros and
Auto 35 higher-than-expected number of furloughs that has extended the timelines for
Cap. Goods 32 deal closures and executions across companies, leading to slower revenue
Logistics 30
Retail 29
conversion in the third quarter. The adverse movement of major currencies
NBFC - Lending 27 (EUR/GBP: -1.2%/-2.0%) is anticipated to further slowdown the reported
Metals 25 growth. The sector should report a median revenue growth of 0.7% QoQ/2.5%
Banks-PVT 23 YoY in 3QFY24 and flat USD revenue YoY, while INR EBIT/INR PAT YoY will
Oil & Gas 21
Healthcare
decline 4.0%/2.0% in 3QFY24.
20
MOFSL Univ. 20  Specialty Chemicals is projected to report an earnings decline of 23%YoY.
Insurance 16  3QFY24 snapshot: We expect EBITDA/PBT/PAT to grow 10%/18%/20% YoY in
Infra 15 3QFY24 for the MOFSL Universe. Excluding Metals and O&G, EBITDA/ PBT/PAT
Real Estate 13
Consumer
for the MOFSL Universe would grow 10%/18%/19% YoY. Sales for the MOFSL
10
Banks-PSU 4 Universe are forecasted to grow 4% YoY. Excluding Metals and O&G, sales are
Technology -2 likely to improve 11% YoY during the quarter.
Media -11  EBITDA margins for Cement, Telecom, Oil & Gas, Automobiles, Logistics,
Chemicals-Spec -23
Healthcare, Consumer, Metals, Retail, Capital Goods and Staffing should expand,
Telecom Loss
while margins for Media, Specialty Chemicals, Technology, EMS and
Infrastructure are likely to contract on a YoY basis.

January 2024 13
 On a roll!
Mastering the game!

 Nifty earnings to grow 10% YoY in 3QFY24: Ex-OMCs, Nifty earnings are
anticipated to grow ~10% YoY. HDFC Bank, Tata Steel, Reliance Industries, ICICI
Bank and JSW Steel are forecasted to drive Nifty earnings, while ONGC, Wipro,
SBI, Coal India and Tech Mahindra are projected to drag the same.
 Nifty earnings, ex Metals/O&G, are likely to grow 9% YoY in 3QFY24.
 FY24E snapshot: MOFSL Universe and Nifty are likely to record 27% YoY and
22% YoY earnings growth, respectively, in FY24E. Excluding Metals and O&G,
MOFSL Universe/Nifty should post 22%/21% YoY earnings growth.

Key sectoral trends and highlights

 The Private Banks (excluding HDFCB) would report a PPoP growth of 8% YoY
(+3% QoQ) and PAT growth of 18% YoY/1.5% QoQ. Earnings growth would be
supported by robust business growth and controlled credit cost, compensating
the continued NIM compression and slightly higher opex. However, we expect
the pace of NIM compression to moderate over 2Q levels and NII to grow 18.5%
YoY (15% YoY ex-HDFCB).
Sectoral sales growth for the quarter-
 Our NBFC - Lending Coverage Universe is likely to report a PBT/PAT growth of 27%
ended Dec’23 (YoY %) YoY each. We expect disbursements to remain healthy across HFCs, vehicle
financing, gold lenders, and diversified lenders driven by strong demand and
EMS 48 sectoral tailwinds. For our coverage universe, we estimate a loan growth of ~20%
NBFC - Non Lending 41 YoY/~5% QoQ in 3QFY24.
Logistics 25
 PSU Banks are likely to report NII growth of 6% YoY, while PPoP is expected to
NBFC - Lending 22
Retail 19
decline 12% YoY and PAT is projected to grow 3.6% YoY in 3QFY24. Earnings growth
Auto 19 is likely to moderate due to elevated opex and slight compression in margins.
Banks-PVT 18  The Auto Universe is likely to report 35% YoY jump in earnings. Ex-TTMT, growth
Cap. Goods 17 will still be healthy at 40% YoY, led by Maruti, M&M, Hero Motocorp and Bajaj
Media 15 Auto. We estimate margins to expand 160bp YoY (+40bp QoQ) for OEMs, driven
Staffing 14
by better gross margins, cost efficiencies, and operating leverage.
Real Estate 13
Healthcare 10  The O&G Universe’s PAT is expected to clock 21% YoY growth (up 9% YoY
Infra 9 excluding OMCs) largely driven by the improvement in marketing margins of the
Insurance 9 OMCs. SG GRM declined QoQ during the quarter due to improving Naphtha and
Cement 8 LPG cracks. PE, PP, and PVC spreads contracted both QoQ and YoY.
Telecom 7
 The Technology Universe is likely to deliver a flat USD revenue growth while INR
Consumer 7
Banks-PSU 6
EBIT/INR PAT would decline 4%/2% YoY in 3QFY24. The sector is expected to
MOFSL Univ. 4 report its first YoY earnings decline after 26 quarters. The combination of
Metals 2 adverse macros and higher-than-expected number of furloughs has extended
Technology 1 the timelines for deal closures and executions across companies, leading to
Oil & Gas -6 slower revenue conversion in the third quarter. The adverse movement of major
Chemicals-Spec -12
currencies is anticipated to weaken the reported growth further.
 Our Consumer Universe is likely to report a sales/EBITDA/PAT growth of 7%/
11%/10% YoY, due to softening demand trends in 3QFY24. FMCG companies may
face challenges with moderating price growth, subdued rural demand, and
intensified competition. Resilient urban demand and margin expansion are
expected to continue. FMCG Universe volumes are likely to post a low single-
digit growth, while paints and adhesive are expected to report a high single-digit
to double-digit volume growth. ‘Cigarette’ is exhibiting moderation in demand
and is forecasted to deliver mid- single-digit volume growth in 3QFY24. Margins
for the Universe are anticipated to expand during the quarter.
 The MOFSL Cement Universe should report an EBITDA/PBT/PAT growth of 54%/
92%/98% YoY, on a low base. This would be the second quarter of earnings
expansion after seven consecutive quarters of decline. Aggregate EBITDA margin
January 2024 14
 On a roll!
Mastering the game!

is likely to expand 540bp YoY to 18% for the Universe. We estimate ~7% YoY
volume growth for our Coverage Universe with industry capacity utilization of
~80% (similar to the last year).
 The Metals Universe is expected to post a sequentially flat performance of
0%/0%/-7% in Revenue/EBITDA/APAT, led by softness in volumes, higher coal
costs and seasonally slow quarter. However, these would be offset by a marginal
improvement in the average ASP. While we expect the non-ferrous sector to
post improved earnings, the ferrous sector is likely to report a mixed
performance. The mining companies are likely to clock strong volume growth.
 The Healthcare Universe is likely to report a sales/EBITDA/PAT growth of 10%/
15%/ 20% YoY in 3QFY24. Sales growth would be aided by a strong traction in
the US generics and a healthy performance in the domestic formulation (DF)
segment in 3Q. Higher share of niche launches in the US generics and subsiding
operational costs aided by lower freight/staff costs would drive EBITDA growth.
 The Telecom Universe would continue to report losses, led by VIL. Subsequently,
we expect 1-2% ARPU increase across the Telcos and 1% industry subscriber
growth in 3Q. Within the industry, Bharti and RJio would continue to see higher
revenue growth of 2.5% and 3.0% YoY, respectively.

Exhibit 9: MOFSL/Nifty Universe to post 20%/10% YoY earnings growth in 3QFY24 (INR b)
PAT
Sales Gr. (%) EBIDTA Gr. (%) Gr. (%) Gr. (%) Delta
Delta
Sector Dec-23 YoY QoQ Dec-23 YoY QoQ Dec-23 YoY QoQ Dec-23 YoY QoQ INRb Share (%)
PAT growth sectors 16,972 3 2 3,020 18 -6 2,157 24 -11 1,590 26 -12 331 85
Cement (11) 510 8 5 92 54 26 61 92 15 45 98 10 22 6
EMS (5) 20 48 20 2 38 40 2 50 33 1 45 24 0 0
Staffing (3) 107 14 6 4 28 14 3 71 31 2 39 31 1 0
NBFC - Non Lending (6) 33 41 6 15 36 6 15 36 6 12 36 6 3 1
Automobiles (24) 2,799 19 1 375 38 1 253 42 -10 189 35 -8 49 13
Capital Goods (11) 849 17 8 100 23 9 87 25 4 60 32 5 15 4
Logistics (7) 143 25 5 51 30 5 34 35 7 27 30 -2 6 2
Retail (18) 479 19 14 65 22 31 43 26 53 32 29 55 7 2
NBFC - Lending (18) 272 22 4 205 22 3 162 27 7 122 27 7 26 7
Metals (10) 2,753 2 0 425 6 0 232 1 -3 166 25 -7 34 9
Banks-Private (13) 865 18 4 645 14 4 556 22 4 422 23 2 79 20
Oil & Gas (15) 7,376 -6 2 869 16 -24 573 25 -34 408 21 -35 71 18
Healthcare (23) 765 10 1 172 15 0 134 18 -2 104 20 -1 18 5
Med/Low growth sectors 3,140 6 4 882 -5 0 660 4 -5 502 6 -2 29 7
Insurance (6) 616 9 3 32 -8 3 21 32 11 20 16 13 3 1
Infrastructure (3) 46 9 8 13 8 10 7 22 23 5 15 41 1 0
Real Estate (10) 114 13 15 33 9 15 26 7 12 22 13 16 3 1
Consumer (19) 814 7 2 199 11 1 191 10 0 144 10 0 13 3
Banks-PSU (6) 858 6 2 501 -12 -5 357 1 -13 261 4 -11 9 2
Others (18) 692 2 7 105 -2 18 58 -7 44 50 2 58 1 0
PAT de-growth sectors 2,562 2 1 717 3 0 402 10 3 268 12 7 28 7
Technology (12) 1,837 1 0 407 -4 -1 374 -2 0 279 -2 1 -6 -2
Media (3) 45 15 -18 10 -8 -33 7 -24 -43 5 -11 -39 -1 0
Chemicals-Specialty (9) 62 -12 0 11 -19 3 9 -23 1 7 -23 2 -2 -1
Telecom (4) 617 7 3 289 16 2 12 LP LP -23 Loss Loss 36 9
MOFSL Universe (254) 22,674 4 2 4,619 10 -4 3,219 18 -8 2,360 20 -8 388 100
Nifty (49) 14,021 6 2 3,471 7 0 2,359 8 -5 1,727 10 -6 162
Sensex (30) 10,584 11 3 2,877 9 2 1,928 10 -2 1,398 13 -2 165

January 2024 15
 On a roll!
Mastering the game!

Exhibit 10: Expect a two-year PBT/PAT CAGR of 10% each for the MOFSL Universe (INR b)
PBT (INR b) Growth (%) PAT (INR b) Growth (%)
Two-year Two-year
Sector Dec-21 Dec-22 Sep-23 Dec-23 YoY QoQ Dec-21 Dec-22 Sep-23 Dec-23 YoY QoQ
CAGR CAGR
Automobiles (24) 91 177 280 253 42 67 -10 59 140 205 189 35 80 -8
Capital Goods (11) 59 70 84 87 25 21 4 38 46 58 60 32 26 5
Cement (11) 44 32 53 61 92 18 15 32 23 41 45 98 19 10
Chemicals-Specialty (9) 10 12 9 9 -23 -4 1 8 9 7 7 -23 -4 2
Consumer (19) 156 174 192 191 10 11 0 118 131 144 144 10 10 0
EMS (5) 1 1 2 2 50 92 33 0 1 1 1 45 93 24
Financials (49) 686 963 1,131 1,111 15 27 -2 506 716 852 836 17 29 -2
Banks-Private (13) 348 455 535 556 22 26 4 262 343 415 422 23 27 2
Banks-PSU (6) 218 352 411 357 1 28 -13 150 252 294 261 4 32 -11
Insurance (6) 6 16 19 21 32 84 11 8 17 17 20 16 56 13
NBFC - Lending (18) 102 128 151 162 27 26 7 77 96 114 122 27 26 7
NBFC - Non Lending (6) 12 11 15 15 36 16 6 9 9 11 12 36 17 6
Healthcare (23) 109 114 137 134 18 11 -2 87 86 105 104 20 9 -1
Infrastructure (3) 5 6 6 7 22 15 23 3 4 3 5 15 26 41
Logistics (7) 26 25 32 34 35 16 7 22 21 28 27 30 12 -2
Media (3) 10 9 12 7 -24 -18 -43 8 6 8 5 -11 -18 -39
Metals (10) 498 230 239 232 1 -32 -3 353 133 179 166 25 -31 -7
Oil & Gas (15) 561 458 862 573 25 1 -34 418 337 624 408 21 -1 -35
Oil Ex OMCs (12) 437 433 510 482 11 5 -6 323 311 358 339 9 2 -5
Real Estate (10) 17 24 23 26 7 22 12 18 20 19 22 13 12 16
Retail (18) 40 34 28 43 26 5 53 30 25 21 32 29 4 55
Staffing (3) 2 1 2 3 71 5 31 2 2 2 2 39 10 31
Technology (12) 342 381 374 374 -2 4 0 256 284 277 279 -2 4 1
Telecom (4) -20 -37 -4 12 LP LP LP -45 -59 -43 -23 Loss Loss Loss
Others (18) 36 62 41 58 -7 28 44 28 49 32 50 2 33 58
MOFSL Universe (254) 2,673 2,739 3,502 3,219 18 10 -8 1,940 1,972 2,562 2,360 20 10 -8
MOFSL Ex Metals and O&G (229) 1,614 2,051 2,401 2,414 18 22 1 1,169 1,502 1,759 1,786 19 24 2
MOFSL Ex OMCs (251) 2,548 2,713 3,150 3,127 15 11 -1 1,845 1,946 2,296 2,291 18 11 0
Nifty (49) 1,946 2,176 2,491 2,359 8 10 -5 1,425 1,565 1,833 1,727 10 10 -6
Sensex (30) 1,548 1,749 1,962 1,928 10 12 -2 1,124 1,233 1,427 1,398 13 12 -2

Sales/PAT for the MOFSL Universe to grow 4%/20% YoY in 3QFY24

Exhibit 11: Expect sales for the MOFSL Universe to grow 4% Exhibit 12: Expect earnings for the MOFSL Universe to grow
YoY in 3QFY24 20% YoY in 3QFY24, led by Auto, BFSI and OMCs
53

143
42

108
31

29
25
29
22

18

17
13
12

51
49

46
35

35

20
23
7

19

18

15
4

14
4
3
2

2
-5

3
-1
-2

-5

-8
Mar-20 -24
June-20 -44
June-20-30

June-23

June-21

June-22
Dec-18

Sep-19
Dec-19

Sep-20
Dec-20

Sep-21
Dec-21

Sep-22
Dec-22

Sep-23
Dec-23E

Dec-18

Sep-19
Dec-19

Sep-20
Dec-20

Sep-21
Dec-21

Sep-22
Dec-22

Sep-23
Dec-23E
Mar-19
June-19

Mar-20

Mar-21
June-21

Mar-22
June-22

Mar-23

Mar-19
June-19

Mar-21

Mar-22

Mar-23
June-23

January 2024 16
 On a roll!
Mastering the game!

Exhibit 13: Expect EBITDA margin to expand 80bp YoY to

18.7% in 3QFY24 Exhibit 14: Expect PAT margin to expand 80bp YoY to 8.9%

11.3

11.4
10.8
Average: 19.3%

10.3
Average: 8.9%

22.3

10.2
21.9
21.8

9.8
20.9

9.3

9.2
9.2

8.9
20.8

9.1
8.9

8.9
20.4

8.4
20.2

8.2

8.1
19.7

7.8
8.3

7.6
19.2

18.7

7.1
18.9
18.9

18.5

18.5
18.3
18.3

18.0

17.9
17.7
18.1

16.4

4.1
Dec-18

Dec-19

Dec-20

Dec-21

Dec-22

June-23

Dec-23E

Dec-18

Dec-19

Dec-20

June-21

Dec-21

June-22

Dec-22

June-23

Dec-23E
Sep-19

Sep-20

Sep-21

Sep-22

Sep-23

Sep-19

Sep-20

Sep-21

Sep-22

Sep-23
Mar-19
June-19

Mar-20
June-20

Mar-21
June-21

Mar-22
June-22

Mar-23

Mar-19
June-19

Mar-20
June-20

Mar-21

Mar-22

Mar-23
Source: MOFSL, excluding Financials and OMCs Source: MOFSL, excluding Financials and OMCs
Exhibit 15: Auto, O&G and Banks to lead; while Spec. Chem and Technology to post an earnings decline in 3QFY24

26 18 15 13 9 7 6 3 3 3 1 1 1 0 2,360
79 71 49 36 34 22
1 2 6

1,972

3QFY24E…
MOFSL 3QFY23…

Telecom

Healthcare

NBFC - Non Lending

Banks-PVT

Oil & Gas

Metals

Cement

Retail

Real Estate

Others
NBFC - Lending

Consumer

Media

Chemicals-Spec
Auto

Insurance

Infra
Cap. Goods

EMS
Banks-PSU

Logistics

Technology
Staffing

MOFSL3QFY24E
MOFSL 3QFY23
PAT (INRb)

PAT (INRb)
MOFSL
Source: MOFSL
Exhibit 16: Sectoral quarterly PAT trend (INR b) – MOFSL Universe to report a 20% YoY growth in PAT
PAT (INR b)
Sector Dec-20 Mar-21 June-21 Sep-21 Dec-21 Mar-22 June-22 Sep-22 Dec-22 Mar-23 June-23 Sep-23 Dec-23E
Automobiles 141 148 8 31 59 86 13 97 140 185 179 205 189
Banks-Private 193 192 174 190 262 295 272 306 343 375 369 415 422
Banks-PSU 87 100 123 148 150 152 133 226 252 300 307 294 261
Insurance 11 4 4 13 8 16 14 15 17 20 18 17 20
NBFC - Lending 53 48 26 67 77 86 78 85 96 105 112 114 122
NBFC - Non Lending 6 7 7 8 9 9 8 9 9 9 9 11 12
Capital Goods 35 59 19 34 38 63 33 42 46 70 45 58 60
Cement 44 54 51 45 32 42 44 21 23 36 41 41 45
Chemicals-Specialty 8 9 9 8 8 10 10 9 9 10 7 7 7
Consumer 110 104 90 109 118 115 121 122 131 132 145 144 144
EMS 0 0 0 0 0 1 1 1 1 2 1 1 1
Healthcare 82 71 89 94 87 77 75 93 86 79 93 105 104
Infrastructure 5 4 3 3 3 6 8 4 4 5 5 3 5
Logistics 19 16 20 19 22 22 27 25 21 25 25 28 27
Media 8 6 5 5 8 7 8 5 6 6 6 8 5
Metals 246 385 373 416 353 414 333 139 133 229 201 179 166
Oil & Gas 296 393 301 385 418 449 244 276 337 528 630 624 408
Real Estate 11 14 6 12 18 19 15 15 20 30 18 19 22
Retail 18 12 -5 17 30 24 24 22 25 18 20 21 32
Staffing 1 2 1 2 2 2 2 1 2 2 2 2 2
Technology 234 227 239 247 256 263 242 264 284 286 271 277 279
Telecom -48 -41 -55 -46 -45 -25 -48 -42 -59 -21 -32 -43 -23
Others 15 11 -11 88 28 19 22 18 49 50 63 32 50
MOFSL Universe 1,573 1,828 1,475 1,896 1,940 2,150 1,677 1,752 1,972 2,479 2,533 2,562 2,360

January 2024 17
 On a roll!
Mastering the game!

Expect profits of Nifty constituents to rise 10% YoY in 3QFY24

 We expect Sales/EBITDA/PBT/PAT for Nifty constituents to improve 6%/7%/
8%/10% YoY propelled by Auto, BFSI and OMCs. Excluding Metals and O&G,
Sales/EBITDA/ PBT/PAT is likely to grow 11%/7%/8%/9% YoY during the quarter.
 HDFC Bank, Tata Steel, Reliance Industries, ICICI Bank and JSW Steel are likely to
drive Nifty earnings, while Wipro, SBI, Coal India, Tech Mahindra and UPL are
projected to drag the same.
 Seventeen Nifty companies are likely to report a PAT growth of above 30% YoY.
Whereas, ten Nifty companies are expected to report a YoY decline in PAT.

Exhibit 17: Sector-wise PAT breakdown for the Nifty constituents in 3QFY24E (YoY %)
73
55 50
41 36 36
Cement, Metals , 26 22 22 21 15 10
Capital Goods and 6 5 4
Autos are likely to
lead Nifty earnings -3
in 3QFY24 -22
PL
Cement

Retail

Auto

Banks-Pvt

Insurance

Healthcare

Nifty

Agro Chem
Metals

Logistics

Oil & Gas

Technology

Banks-PSU
Telecom

NBFC
Cap Goods

Consumer

Utilities
Source: MOFSL

Exhibit 19: Expect Nifty’s EBITDA to improve 7% YoY during

Exhibit 18: Expect Nifty’s revenue to grow 6% YoY in 3QFY24 the quarter
46
35 40
28 27 27
22
17 26 23 22 22 21
18 13
12
8 7 6 6 15 15 17 16 15 13 12
2 10 7 10 9 7
0 1 7
6

-4 -4
-2
-10
-25
Dec-18

Sep-19
Dec-19

Sep-20
Dec-20

Sep-21
Dec-21

Sep-22
Dec-22

Sep-23
Dec-23E

Dec-18

Sep-19
Dec-19

Sep-20
Dec-20

Sep-21
Dec-21

Sep-22
Dec-22
Mar-23

Sep-23
Dec-23E
Mar-19

Mar-20

Mar-21

Mar-22

Mar-23

Mar-19

Mar-20

Mar-21

Mar-22
June-19

June-20

June-21

June-22

June-23

June-19

June-20

June-21

June-22

June-23

Exhibit 20: Expect Nifty’s PAT to rise 10% YoY in 3QFY24

107
84

39 32 28
18 19 20 26 22 22
11 11 15 10
8 9
5 10

-23
-32
Dec-18

Sep-19

Dec-19

Sep-20

Dec-20

Sep-21

Dec-21

Sep-22

Dec-22

Sep-23

Dec-23E
Mar-19

June-19

Mar-20

June-20

Mar-21

June-21

Mar-22

June-22

Mar-23

June-23

January 2024 18
 On a roll!
Mastering the game!

Exhibit 21: Nifty’s earnings snapshot for 3QFY24 (INR b)

Sales Gr. (%) EBITDA Gr. (%) PBT Gr. (%) PAT Gr. (%)
Company Sector Dec-23 YoY QoQ Dec-23 YoY QoQ Dec-23 YoY QoQ Dec-23 YoY QoQ
Bajaj Auto Auto 121 29.9 12.2 24 36.5 13.7 27 37.4 12.4 20 37.1 11.4
Eicher Motors Auto 40 8.1 -2.3 11 27.1 0.3 11 26.0 -5.2 10 30.2 -5.1
Hero MotoCorp Auto 96 20.0 2.0 13 45.2 1.0 14 46.8 -1.2 10 46.2 -1.4
M&M Auto 255 17.8 4.9 32 15.2 5.8 30 17.1 -30.7 23 14.9 -32.5
Maruti Suzuki Auto 335 15.2 -9.7 41 43.6 -15.0 40 34.6 -17.1 31 30.7 -17.3
Tata Motors Auto 1,074 21.4 2.2 138 42.7 0.2 49 51.7 -20.5 35 18.6 -9.1
Axis Bank Banks-Private 127 10.9 3.2 91 -2.1 5.2 81 3.7 4.0 61 3.9 3.7
HDFC Bank Banks-Private 291 26.8 6.4 240 26.2 5.8 211 30.1 6.6 162 32.5 1.7
ICICI Bank Banks-Private 185 12.3 1.0 141 6.6 -0.6 133 20.4 -2.8 100 20.1 -2.7
IndusInd Bank Banks-Private 53 17.8 4.3 41 10.5 4.2 31 18.8 6.1 23 18.6 5.8
Kotak M. Bank Banks-Private 65 15.2 3.5 48 25.5 4.8 45 20.3 4.9 34 20.3 5.2
State Bank Banks-PSU 402 5.5 1.7 174 -31.0 -10.3 147 -24.5 -23.9 110 -22 -23.1
HDFC Life Insur. Insurance 167 14.3 11.5 9 8.2 18.2 4 13.7 8.1 4 11.2 -7.0
SBI Life Ins. Insurance 197 2.1 -2.2 14 -4.4 -3.2 4 30.7 5.0 4 32.1 5.7
Bajaj Finance NBFC - Lending 76 29.1 6.3 62 27.4 5.9 50 25.1 5.5 37 25.3 4.9
Bajaj Finserv NBFC - Lending 272 25.0 4.5 272 25.0 4.5 54 22.3 2.1 21 16.8 7.9
L&T Capital Goods 538 16.1 5.5 62 22.2 10.1 53 26.0 6.0 35 41.2 7.7
Grasim Ind. Cement 65 4.2 0.2 6 21.4 -2.4 3 32.3 -70.2 2 23.7 -75.0
Ultratech Cem Cement 168 8.3 5.0 34 44.6 32.4 25 66.1 50.1 19 80.9 49.4
Asian Paints Consumer 95 9.8 11.8 18 13.9 6.9 17 16.3 3.4 12 12.5 0.2
Britannia Consumer 44 4.6 -1.0 8 3.3 -3.2 8 0.1 -3.3 6 2.6 -3.0
Hind. Unilever Consumer 159 4.4 4.1 39 10.4 5.7 38 8.8 4.1 28 9.2 5.7
ITC Consumer 172 5.7 3.7 64 2.8 5.8 67 0.6 3.2 51 0.8 3.0
Nestle Consumer 47 11.0 -6.2 11 16.6 -7.3 10 18.4 -8.8 8 19.9 -5.9
Tata Consumer Consumer 38 8.6 1.0 5 14.9 -2.9 5 15.3 -7.9 3 16.4 -2.4
Apollo Hospitals Healthcare 47 10.5 -2.8 6 17.4 -5.4 3 20.9 -7.4 2 53.8 1.9
Cipla Healthcare 65 11.5 -3.0 16 10.4 -10.3 14 13.3 -15.7 10 21.1 -17.4
Divis Labs Healthcare 20 19.1 6.5 6 38.4 13.3 5 38.8 12.9 4 47.8 14.1
Dr Reddy’ s Healthcare 69 1.5 -0.1 19 -7.1 -4.3 16 -5.6 -5.6 12 -7.6 -8.8
Sun Pharma Healthcare 123 11.6 2.2 32 14.1 4.3 28 19.3 0.2 25 20.5 4.1
Adani Ports Logistics 69 43.4 3.2 40 34.4 4.3 27 44.4 6.9 21 36.2 -4.6
Coal India Metals 348 -1.1 6.2 85 -24.5 -4.6 75 -28.9 -14.7 57 -27.0 -16.7
Hindalco Metals 508 -4.5 -6.3 62 73.7 9.8 37 208.6 16.9 29 111.5 33.1
JSW Steel Metals 411 5.1 -7.7 66 44.9 -16.4 28 171.7 -30.1 21 328.8 -31.5
Tata Steel Metals 614 7.6 10.3 50 23.9 17.6 10 451.5 1,668.0 6 LP -18.2
BPCL Oil & Gas 1,004 -15.8 -2.6 63 44.5 -51.4 44 105.4 -61.4 33 66.7 -61.6
ONGC Oil & Gas 350 -9.3 -0.5 179 -12.3 -2.5 122 -16.7 -9.3 91 -17.2 -10.5
Reliance Inds. Oil & Gas 2,402 10.6 3.6 411 16.6 0.3 263 14.2 -0.9 176 11.6 1.4
Titan Company Retail 145 25.1 16.0 18 31.1 25.2 16 31.7 31.0 12 36.2 35.7
HCL Technologies Technology 280 5.0 5.1 60 -4.4 2.3 53 -1.3 3.4 40 -1.6 5.2
Infosys Technology 385 0.5 -1.2 96 -6.3 -5.1 84 -5.9 -4.2 62 -6.4 -0.8
LTIMindtree Technology 90 5.0 1.6 16 11.3 -0.7 15 10.6 1.2 12 6.7 -0.8
TCS Technology 597 2.5 0.0 158 1.7 0.9 156 6.8 2.0 116 7.0 2.3
Tech Mahindra Technology 128 -7.0 -0.7 14 -36.2 -2.8 11 -40.4 -4.2 8 -39.3 -19.5
Wipro Technology 221 -5.0 -2.0 39 -16.4 -7.2 33 -17.0 -6.0 25 -18.4 -5.8
Bharti Airtel Telecom 380 6.2 2.6 201 9.0 3.1 60 37.5 8.8 30 49.9 1.0
NTPC Utilities 460 11.0 12.5 120 -9.7 13.4 60 -22.7 14.6 51 12.9 30.1
Power Grid Utilities 124 13.0 20.9 105 9.0 15.8 45 13.1 4.0 36 -3.5 -6.8
UPL Others 101 -26.5 -1.1 10 -66.0 -34.4 -4 PL Loss -1 PL PL
Nifty Universe 14,021 6.5 2.2 3,471 7.4 -0.4 2,359 8.4 -5.3 1,727 10.3 -5.8
Note: For Banks: Sales = Net Interest Income, EBITDA = Operating Profits; For Life Insurance: Sales = Net Premium, EBITDA = VNB.

January 2024 19
 Auto 528 Auto 252
Telecom 64 Oil & Gas 141

January 2024
Banks-PSU 67
Banks-PSU 61

1HFY24 (%)
1HFY24 (%)
MOFSL Univ. 49
Cap. Goods 45 EMS 42
Oil & Gas 36 NBFC - Lending 39
Capital Goods 38
Banks-PVT 36
Banks-PVT 36
NBFC - Lending 32 Cement 26
Nifty Univ. 30 MOFSL Ex OMCs 24
Real Estate 24
Nifty Ex OMCs 21
NBFC - Non Lending 20
Consumer 19 Insurance 20




Insurance 17 Consumer 19
Healthcare 18
Healthcare 13
Media 17

1HFY24 PAT growth (%)

1HFY24 PAT growth (%)
Technology 8 Staffing 9
Logistics 7 Technology 8
2HFY24.

Logistics 3
Utilities 6
Retail -12

Exhibit 24: Sectoral PAT growth for Nifty Universe in

Retail 3 Metals -20
Exhibit 22: Sectoral PAT growth for MOFSL Universe in

Cement -2 Chemicals-Spec -26

Infra-33
Metals -13
Telecom-50

Cement 67
Cement 58
Auto, Pvt Banks and Cement

Staffing 58
Retail 41 NBFC - Non Lending 46
NBFC - Lending 24 EMS 43

2HFY24E (%)
2HFY24E (%)

Logistics 24 Retail 34
Infra 33
Metals 24 Auto 28
Auto 22 Healthcare 27
Insurance 21 Real Estate 27
NBFC - Lending 26
Banks-PVT 21
Insurance 25
Cap. Goods 20 Logistics 22
Healthcare 16 Banks-PVT 21
Capital Goods 20
We expect Nifty-50’s earnings to grow 8% YoY in 2HFY24.

Telecom 13
MOFSL Ex OMCs 14
2HFY24 PAT growth (%)

Nifty Ex OMCs 9 MOFSL Univ. 12

2HFY24 PAT growth (%)

Nifty Univ. 8 Consumer 11

Consumer 7 Metals 4
Banks-PSU 0
Utilities 4
Technology 0
Exhibit 25: Sectoral PAT growth for Nifty Universe in

Oil & Gas 0 Oil & Gas 0

Exhibit 23: Sectoral PAT growth for MOFSL Universe in

Media -7
Metals, which was the key laggard in 1HFY24, would contribute to earnings

Technology 0
Expect profit growth of MOFSL/Nifty Universe at 12%/8% YoY in 2HFY24
We expect PAT for the MOFSL Universe to grow 12% YoY in 2HFY24 driven by

Banks-PSU -21 Chemicals-Spec -18

Telecom-20

20
growth in 2HFY24. Conversely, O&G and Telecom sectors would drag earnings in
Mastering the game!
On a roll!
 On a roll!
Mastering the game!

Exhibit 26: Expect 21% PAT CAGR for the MOFSL Universe over FY23-25
Sales EBIDTA PAT Delta
EBIDTA Margin (%) PAT (INR b) PAT Grw / CAGR (%)
CAGR (%) CAGR (%) Share (%)

Sector (FY23-25) (FY23-25) FY24E FY25E FY26E FY24E FY25E FY26E FY24E FY25E FY26E (FY23-25) (FY23-25)
High PAT CAGR (>25%) 7 21 14.5 13.5 13.9 3,599 3,844 4,432 75 7 15 37 44
Telecom (4) 8 12 47.1 47.8 48.8 -125 1 77 Loss LP 9,917 LP 4
EMS (5) 39 38 12.2 13.2 14.0 6 9 14 43 54 46 48 0
Auto (24) 14 31 13.5 14.0 14.3 805 908 1,041 85 13 15 44 12
Staffing (3) 16 29 3.5 4.1 4.0 8 13 15 34 52 18 42 0
Others (18) 10 22 15.4 16.6 17.5 195 278 352 37 43 27 40 3
Real Estate (10) 19 29 30.1 31.6 34.6 100 142 155 26 42 9 34 2
Capital Goods (11) 16 21 11.9 12.3 12.5 236 292 353 30 24 21 27 3
Oil & Gas (15) 4 20 12.6 10.8 11.0 2,348 2,169 2,385 72 -8 10 26 20
Ex OMCs (12) 3 12 16.4 16.2 16.7 1,527 1,670 1,899 18 9 14 13 9
Media (3) 18 21 23.3 25.3 26.7 25 32 39 23 27 22 25 0
Medium PAT CAGR (15-25%) 12 20 34.3 36.5 38.3 4,708 5,682 6,885 19 21 21 20 42
Retail (18) 20 21 12.4 13.2 13.5 97 133 173 11 37 30 23 1
Cement (11) 7 23 16.8 18.5 19.6 226 266 313 28 18 18 23 2
Healthcare (23) 12 19 22.3 23.1 23.2 408 487 565 24 19 16 22 4
Financials (53) 12 19 41.7 44.5 46.8 3,868 4,666 5,677 18 21 22 19 34
Banks-PVT (13) 20 21 74.6 76.1 77.4 1,702 2,040 2,456 27 20 20 24 17
Banks-PSU (6) 11 13 62.9 68.1 69.8 1,232 1,560 1,877 28 27 20 27 15
Insurance (7) 6 30 9.6 10.9 13.0 367 369 485 -15 1 31 -7 -2
NBFC - Lending (21) 23 24 75.8 76.0 77.0 519 639 791 2 23 24 12 3
NBFC - Non Lending (6) 27 32 52.4 56.1 56.9 48 58 68 45 21 18 33 1
Logistics (7) 17 18 36.0 36.1 36.2 109 130 157 12 18 21 15 1
Low PAT CAGR (<15%) 6 9 18.9 20.3 20.9 2,507 3,017 3,482 1 20 15 10 13
Consumer (19) 9 14 24.7 25.1 25.3 587 660 737 16 12 12 14 4
Metals (10) 4 7 15.0 17.0 17.5 754 1,012 1,164 -10 34 15 10 4
Technology (12) 7 8 22.2 23.0 24.0 1,118 1,284 1,509 4 15 18 9 5
Infrastructure (3) 9 6 27.1 27.4 27.9 19 23 26 -5 22 15 8 0
Chemicals-Specialty (9) 2 2 17.4 18.7 19.6 30 38 46 -22 28 20 0 0
MOFSL (258) 8 17 19.9 20.2 21.2 10,815 12,542 14,799 27 16 18 21 100
MOFSL Ex OMCs (255) 9 16 22.1 23.3 24.4 9,995 12,043 14,313 19 20 19 20 NA
Nifty (50) 7 15 22.5 23.4 24.3 7,622 8,824 10,229 22 16 16 19 NA
Sensex (30) 11 16 26.1 27.6 28.6 5,867 7,040 8,214 20 20 17 20 NA
Note: For Banks, sales represent net interest income, and EBITDA represents operating profit; Sensex and Nifty Numbers are free float Source: MOFSL

January 2024 21
 On a roll!
Mastering the game!

Exhibit 27: Top upgrades/downgrades for Nifty in FY24E

REVIEW-2QFY24 Current EPS EPS UPGRADE / EPS GROWTH
(INR)
EPS (INR) (INR) DOWNGRADE (%) (%)
FY24E FY25E FY24E FY25E FY24E FY25E FY24E FY25E
BPCL 119.7 47.1 128.1 76.4 7.0 62.1 1259.2 -40.3
HDFC Life Insur. 7.7 9.0 8.2 8.8 6.0 -2.4 29.4 8.0
Larsen & Toubro 93.9 116.0 97.6 120.9 3.9 4.2 28.6 23.9
Asian Paints 54.5 61.6 56.0 62.2 2.7 0.9 26.5 11.0
Hind. Unilever 44.8 50.3 46.0 51.4 2.5 2.1 7.8 11.7
Bajaj Auto 276.1 309.0 282.6 315.2 2.3 2.0 31.9 11.6
Adani Ports 39.3 43.6 40.2 46.5 2.3 6.6 14.8 15.7
Hindalco 46.3 50.2 47.3 56.7 2.1 12.9 4.4 19.8
SBI Life Insurance 20.1 23.2 20.3 23.8 1.1 2.8 17.8 17.5
ICICI Bank 57.0 65.5 57.3 65.4 0.5 -0.2 25.1 14.1
Kotak Mahindra Bank 91.6 104.9 92.0 105.4 0.4 0.5 21.1 14.6
Wipro 19.6 23.1 19.6 22.8 0.2 -1.6 -5.3 16.2
Sun Pharma 39.4 46.6 39.5 45.6 0.1 -2.2 10.4 15.5
Cipla 47.4 53.4 47.4 53.4 0.0 0.0 25.7 12.5
Dr Reddy’ s Labs 296.7 308.8 296.7 308.8 0.0 0.0 21.2 4.1
Nestle 29.8 36.8 29.8 36.0 0.0 -2.1 20.3 20.7
Apollo Hospitals 63.7 90.8 63.7 92.5 0.0 1.9 32.2 45.3
Coal India 41.1 41.1 41.1 41.1 0.0 0.0 -10.1 0.2
Britannia 88.6 103.8 88.5 98.2 -0.1 -5.4 10.1 10.9
Bharti Airtel 20.5 30.7 20.4 30.5 -0.4 -0.6 49.9 49.8
Hero MotoCorp 201.0 213.2 199.7 215.7 -0.6 1.2 37.2 8.0
Reliance Inds. 103.1 118.8 102.4 120.9 -0.7 1.8 3.9 18.1
TCS 126.9 145.1 126.0 143.7 -0.8 -0.9 9.3 14.1
IndusInd Bank 118.3 146.8 117.4 145.5 -0.8 -0.9 22.3 24.0
Eicher Motors 148.6 168.7 147.5 167.2 -0.8 -0.9 38.4 13.4
Bajaj Finance 240.1 309.8 238.0 306.3 -0.9 -1.1 25.0 28.7
Grasim Industries 95.8 98.6 94.7 97.3 -1.2 -1.4 -3.8 2.7
Mahindra & Mahindra 90.7 95.6 89.4 94.4 -1.4 -1.3 37.8 5.6
HCL Technologies 58.1 65.9 57.2 65.0 -1.5 -1.4 4.4 13.6
Tata Consumer 14.6 19.4 14.4 19.3 -1.7 -0.6 23.0 34.3
Maruti Suzuki 450.8 470.7 443.3 460.9 -1.7 -2.1 63.1 4.0
ITC 16.6 19.0 16.3 18.4 -1.8 -3.6 8.4 12.6
HDFC Bank 83.5 101.5 82.0 98.8 -1.9 -2.7 3.4 20.5
Infosys 61.1 69.2 59.7 68.0 -2.3 -1.6 3.7 13.9
Ultratech Cement 256.4 311.5 250.3 310.1 -2.4 -0.4 42.7 23.9
Titan Company 46.1 59.9 44.9 54.9 -2.7 -8.4 22.0 22.4
Tata Motors 44.4 44.5 43.2 49.5 -2.7 11.3 1907.3 14.7
LTIMindtree 165.2 205.8 160.1 195.5 -3.1 -5.0 5.5 22.1
Divis Labs 63.0 83.7 60.9 81.1 -3.2 -3.1 -6.1 33.2
Axis Bank 79.3 95.9 76.7 93.9 -3.3 -2.0 7.5 22.4
ONGC 44.9 42.1 42.7 45.0 -4.8 7.0 40.7 5.4
Tech Mahindra 44.1 54.7 41.8 51.1 -5.2 -6.6 -27.0 22.3
State Bank 78.1 89.5 70.7 90.5 -9.6 1.1 13.3 28.1
JSW Steel 49.6 77.2 42.3 65.3 -14.8 -15.4 187.7 54.4
Tata Steel 5.9 11.8 4.5 10.9 -24.5 -7.7 -36.6 142.8
UPL 49.9 59.5 13.8 34.4 -72.4 -42.2 -76.5 149.5
Nifty (50) 996 1,140 976 1,142 -2.0 0.2 21.1 16.9
Source: MOFSL

January 2024 22
 Nifty-50 FY24E
Nifty-50 PAT
FY24E… 7,622 Nifty-50
Nifty-50 PAT 6,224
FY23FY23…
SBI 177 BPCL 248
HDFC Bk 127 HDFC Bk 176

January 2024
Reliance Ind 125 ONGC 159
Tata Steel 78 Tata Motors 157
TCS 65 ICICI Bk 81
Axis Bk 61 SBI 74
Bharti Airtel 57 JSW Steel 67
ICICI Bk 56 Maruti Suzuki 52
JSW Steel 56 TCS 39
Bajaj Finance 42 Bharti Airtel 38
Infosys 34 Kotak Mah Bk 32
L&T 32 Bajaj Finance 31
ONGC 30 L&T 30
Kotak Mah Bk 27 M&M 29
NTPC 27 NTPC 26
ITC 26 Reliance Ind 26
IndusInd Bk 22 Axis Bk 22
HCL Tech 21 Ultratech 22
Hindalco 21 Bajaj Auto 19
Bajaj Finserv 21 Bajaj Finserv 18
Ultratech 17 IndusInd Bk 17
Tata Motors 17 ITC 16
UPL 16 Nestle 14
Sun Pharma 15 Asian Paints 11
Wipro 14 Eicher Mot 11
Adani Ports 14 Adani Ports 11
HUL 13 Hero Moto 11

Exhibit 29: Absolute FY25E PAT change for Nifty constituents (INR b)
Exhibit 28: Absolute FY24E PAT change for Nifty constituents (INR b)

Maruti Suzuki 11 Sun Pharma 9

LTIMindtree 10 Dr Reddy’s 9
Bajaj Auto 9 HUL 8
Titan Co 9 Cipla 8
Tech Mah 8 Titan Co 7
Power Grid 7 HCL Tech 7
M&M 6 Infosys 6
Asian Paints 6 Hindalco 4
Eicher Mot 5 HDFC Life 4
Divis Labs 5 Power Grid 4
Cipla 5 SBI Life 3
Apollo Hosp. 4 Tata Consumer 3
Tata Consumer 4 LTIMindtree 2
SBI Life 4 Apollo Hosp. 2
Hero Moto 3 Britannia 2
Britannia 2 Adani Ent. 0
Dr Reddy’s 2 Divis Labs 1
Grasim 2 Grasim 2
HDFC Life 1 Wipro 7
Coal India 0 Tech Mah 14
Adani Ent. 0 Coal India 29
Nestle 4 Tata Steel 32
BPCL 108 UPL 34
Nifty-50
Nifty-50 FY25E…
FY25E PAT 8,824 Nifty-50
Nifty-50 FY24E…
FY24E PAT 7,622

23
Mastering the game!
On a roll!
 On a roll!
Mastering the game!

Exhibit 30: Nifty performance – Expect FF PAT CAGR (FY23-25E) of 20%

Sales (INR b) Sales EBIDTA Margin (%) EBITDA PAT (INR b) PAT Contbn to
CAGR % CAGR % CAGR %
Company FY24E FY25E FY26E FY24E FY25E FY26E FY24E FY25E FY26E Delta %
23-25 23-25 23-25
High PAT Growth (20%+) 31,993 34,989 38,067 7 23 24 25 20 3,929 4,601 5,382 31 73
Tata Motors 4,338 4,667 5,095 16 13 14 15 44 165 182 225 370 7
BPCL 4,203 4,252 4,395 -5 10 6 6 66 268 160 160 185 5
JSW Steel 1,767 1,986 2,126 9 16 19 20 44 102 158 178 111 5
Bharti Airtel 1,515 1,648 1,799 9 53 53 54 11 114 171 206 50 4
Apollo Hospitals 185 211 247 13 13 13 14 16 9 13 19 39 0
Ultratech Cement 703 757 839 9 18 20 22 21 72 90 108 33 1
Maruti Suzuki 1,433 1,566 1,712 15 12 12 12 30 134 145 160 33 2
HDFC Bank 1,114 1,341 1,592 24 82 83 85 26 617 743 895 30 12
Bajaj Finance 296 381 484 29 81 81 80 28 146 189 240 28 3
Tata Consumer 153 166 181 10 14 15 15 18 14 18 20 28 0
Bajaj Finserv 363 458 564 28 71 66 62 22 82 103 115 27 2
Larsen & Toubro 2,097 2,427 2,771 15 12 12 12 18 134 166 202 26 2
Eicher Motors 161 183 209 14 27 28 28 22 40 46 53 25 1
Tata Steel 2,388 2,621 2,777 4 9 13 13 3 55 133 154 24 2
IndusInd Bank 208 250 299 19 77 78 78 16 91 113 139 23 1
Titan Company 513 589 682 21 11 12 13 21 40 49 60 22 1
Hero MotoCorp 371 404 441 9 14 14 15 20 40 43 49 22 1
ONGC 6,141 6,613 6,840 -2 17 17 17 15 548 578 653 22 7
Bajaj Auto 457 515 572 19 20 20 20 25 80 89 99 21 1
Mahindra & Mahindra 1,006 1,105 1,209 14 13 13 13 18 107 113 125 21 1
Nestle 244 221 248 14 24 24 24 20 38 35 39 20 0
State Bank 1,599 1,781 1,995 11 51 61 63 14 631 808 949 20 10
ICICI Bank 739 847 989 17 77 78 79 16 400 457 533 20 5
Medium PAT Growth (0-20%) 26,557 29,253 32,183 7 22 23 23 11 3,330 3,834 4,389 11 29
Cipla 257 281 306 11 23 24 24 14 38 43 46 19 0
Asian Paints 369 414 458 10 21 21 22 18 54 60 68 19 1
HDFC Life Insur. 657 788 940 18 6 6 6 14 18 19 21 18 0
Kotak Mahindra Bank 257 292 343 16 76 76 76 22 183 209 246 18 2
SBI Life Insurance 769 911 1,086 17 7 7 7 13 20 24 26 18 0
Axis Bank 500 594 703 18 72 76 79 19 241 302 369 17 3
Adani Ports 268 311 354 22 59 59 60 20 87 100 122 15 1
NTPC 1,801 1,921 2,041 4 29 29 30 9 195 222 242 15 2
LTIMindtree 360 406 469 11 18 20 21 13 47 58 72 14 0
Sun Pharma 488 544 608 12 26 27 27 14 95 110 129 13 1
Dr Reddy’ s Labs 272 299 332 11 28 27 26 14 49 51 54 12 0
Hindalco 2,156 2,279 2,513 1 11 11 11 7 105 126 142 12 1
Divis Labs 78 91 105 8 28 31 32 9 16 22 26 12 0
TCS 2,401 2,664 2,981 9 27 27 28 10 462 527 615 12 4
Reliance Inds. 9,380 10,456 11,362 9 17 17 18 12 693 818 937 11 6
Britannia 171 187 207 7 19 19 19 11 21 24 27 11 0
ITC 677 746 800 6 38 38 39 9 203 228 249 11 2
Hind. Unilever 623 690 752 8 24 24 24 11 108 121 132 10 1
HCL Technologies 1,090 1,189 1,329 8 22 22 22 8 155 176 197 9 1
Infosys 1,546 1,680 1,873 7 24 25 26 8 247 282 330 8 2
Power Grid Corp. 481 497 502 4 83 85 87 4 158 165 167 3 0
Wipro 896 953 1,059 3 18 19 20 3 106 121 143 3 0
Adani Enterprises 1,059 1,059 1,059 -12 9 9 9 7 27 27 27 0 0
PAT de-growth (<0%) 2,607 2,831 3,114 2 19 19 20 -5 363 389 458 -6 -2
Grasim Industries 258 292 313 4 10 10 11 -5 62 64 70 -1 0
Coal India 1,391 1,485 1,640 4 24 23 24 -3 253 254 283 -5 -1
Tech Mahindra 518 554 617 2 12 13 15 -4 37 45 60 -5 0
UPL 440 499 544 -3 14 17 19 -13 11 26 46 -23 -1
Nifty (PAT free float) 61,158 67,073 73,364 7 23 23 24 15 4,291 5,018 5,854 20 100

January 2024 24
 On a roll!
Mastering the game!

Valuations in line with LPA for Nifty

 Nifty is trading at a 12-month forward P/E of 19.7x, in-line with its own long
period average (LPA). Notably, Nifty-50’s EPS CAGR of 15% (to INR977 in FY24E)
was in line with the index CAGR of 15% during the last five years (ended Dec’23).
 India’s market capitalization-to-GDP ratio has been volatile, plummeting to 56%
(of FY20 GDP) in Mar’20 from 80% in FY19 and then sharply reviving to 113% in
FY22; the ratio moderated to 95% in FY23 though. The ratio is now at 124% (of
FY24E GDP), above its long-term average of 80%. We expect the nominal GDP to
increase 8.2%/10.1% YoY in FY24/FY25.
Exhibit 31: Markets scaling new highs; valuations in-line with the LPA
Nifty P/E (x) Nifty Index
CY13-23: 21,731
24 Nifty CAGR: 13%
20,000
Avg P/E: 20.2

22
10 Year Avg: 20.2
19.7 15,000
19

10,000
17

14 5,000
Dec-13

Dec-14

Dec-15

Dec-16

Dec-17

Dec-18

Dec-19

Dec-20

Dec-21

Dec-22

Dec-23
Exhibit 32: 12-month forward Nifty P/B (x) Exhibit 33: 12-month forward Nifty RoE (%)
3.7 17.3
3.2 16.1
3.2 Long-term average: 2.8x
15.6 15.1
2.7 10 Year Avg: 13.7%
13.9
2.2
12.2
1.7
10.5
1.2
Dec-13

Dec-14

Dec-15

Dec-16

Dec-17

Dec-18

Dec-19

Dec-20

Dec-21

Dec-22

Dec-23
Dec-08
Dec-09
Dec-10
Dec-11
Dec-12
Dec-13
Dec-14
Dec-15
Dec-16
Dec-17
Dec-18
Dec-19
Dec-20
Dec-21
Dec-22
Dec-23

Exhibit 34: Trend in India’s market-cap-to-GDP (%)

Nominal GDP growth in
GFC: Peak of 149% in Dec’07 FY23/FY24E: 16.1%/8.2%
124
Average of 80% for the period Lowest since 103 113
105 97 95
90 83
83 83 81 80
71 64 66 69 79
56 56
FY06

FY07

FY08

FY09

FY10

FY11

FY12

FY13

FY14

FY15

FY16

FY17

FY18

FY19

FY20

FY21

FY22

FY23

FY24E

January 2024 25
 On a roll!

Sectors & Companies

BSE Sensex: 71,848 Nifty 50: 21,659 January 2024

MOFSL Universe:
3QFY24 Highlights & Ready Reckoner

Note: In our quarterly performance tables, our four-quarter numbers may not always add up to the
full-year numbers. This is because of differences in classification of account heads in the company’s
quarterly and annual results or because of differences in the way we classify account heads as opposed
to the company. All stock prices and indices as on 1 January 2024, unless otherwise stated.

January 2024 26
 On a roll!

MOFSL Universe: 3QFY24 aggregate performance highlights

Exhibit 1: Quarterly Performance - MOFSL Universe (INR b)
Sector Sales EBITDA PAT
(Nos of Cos) Dec-23 Var. % YoY Var. % QoQ Dec-23 Var % YoY Var % QoQ Dec-23 Var % YoY Var % QoQ
Automobiles (24) 2,799 18.6 1.4 375 37.8 0.9 189 35.4 -7.7
Capital Goods (11) 849 17.4 8.0 100 22.5 9.0 60 32.4 4.6
Cement (11) 510 8.5 4.7 92 54.4 26.0 45 97.7 10.4
Chemicals-Specialty (9) 62 -12.2 0.2 11 -18.7 3.2 7 -22.8 1.9
Consumer (19) 814 6.7 1.6 199 10.9 1.4 144 9.7 0.2
EMS (5) 20 48.1 20.4 2 37.9 39.6 1 45.3 24.4
Financials (49) 2,645 12.5 3.3 1,397 3.8 0.5 836 16.8 -1.8
Banks-Private (13) 865 18.5 4.1 645 14.4 4.1 422 23.1 1.5
Banks-PSU (6) 858 6.2 2.2 501 -11.9 -5.2 261 3.6 -11.3
Insurance (6) 616 8.8 3.2 32 -7.9 3.2 20 15.8 13.4
NBFC - Lending (18) 272 21.6 4.3 205 21.5 3.4 122 27.4 7.1
NBFC - Non Lending (6) 33 40.6 6.3 15 35.7 6.0 12 36.1 6.2
Healthcare (23) 765 10.5 0.5 172 15.4 0.3 104 20.3 -1.2
Infrastructure (3) 46 8.8 8.4 13 7.5 9.7 5 14.7 41.4
Logistics (7) 143 25.2 5.4 51 29.9 5.0 27 29.9 -1.9
Media (3) 45 14.8 -17.8 10 -7.9 -33.4 5 -11.4 -39.4
Metals (10) 2,753 1.6 0.0 425 5.7 0.0 166 25.5 -7.1
Oil & Gas (15) 7,376 -6.1 1.5 869 16.3 -23.6 408 20.9 -34.7
Oil Ex OMCs (12) 3,657 3.9 5.0 702 11.5 -1.5 339 8.9 -5.4
Real Estate (10) 114 13.0 14.6 33 8.9 14.6 22 13.4 16.3
Retail (18) 479 19.4 14.5 65 22.5 30.5 32 29.1 55.2
Staffing (3) 107 14.4 6.3 4 27.7 14.1 2 38.5 31.1
Technology (12) 1,837 1.3 0.4 407 -4.3 -1.3 279 -2.1 0.5
Telecom (4) 617 7.0 3.3 289 16.3 2.5 -23 Loss Loss
Others (18) 692 2.2 6.7 105 -1.7 18.4 50 2.1 57.5
MOFSL Universe (254) 22,674 3.7 2.2 4,619 10.5 -4.0 2,360 19.7 -7.9
Nifty (49) 14,021 6.5 2.2 3,471 7.4 -0.4 1,727 10.3 -5.8
Sensex (30) 10,584 10.6 3.1 2,877 8.9 2.1 1,398 13.4 -2.0
For Banks: Sales = Net Interest Income, EBITDA = Operating Profits; For Life Insurance: Sales = Net Premium, EBITDA = VNB

Exhibit 2: Quarter-wise sales growth (% YoY)

12.6

3.6 3.2 3.7

Mar-23 Jun-23 Sep-23 Dec-23E

Exhibit 3: Quarter-wise net profit growth (% YoY)

PAT growth YoY (%)

51.1 46.2

19.7
15.3

Mar-23 Jun-23 Sep-23 Dec-23E

January 2024 27
 On a roll!

Annual performance - MOFSL universe (INR Billion)

Sales (INR b) Chg. YoY (%) EBIDTA (INR b) Chg. YoY (%) PAT (INR b) Chg. YoY (%)
Sector FY24E FY25E FY26E FY24E FY25E FY26E FY24E FY25E FY26E FY24E FY25E FY26E FY24E FY25E FY26E FY24E FY25E FY26E
Auto (24) 11,399 12,451 13,594 20.0 9.2 9.2 1,540 1,742 1,945 52.1 13.1 11.7 805 908 1,041 85.2 12.7 14.7
Capital Goods (11) 3,287 3,829 4,391 16.2 16.5 14.7 390 471 547 20.8 20.8 16.2 236 292 353 29.6 23.8 20.9
Cement (11) 2,103 2,294 2,504 4.6 9.1 9.2 353 425 491 25.6 20.3 15.4 226 266 313 28.3 17.5 17.7
Chemicals-Specialty (9) 259 306 348 -11.5 18.1 13.7 45 57 68 -18.9 27.1 19.3 30 38 46 -22.4 27.9 20.5
Consumer (19) 3,297 3,614 3,976 8.1 9.6 10.0 813 908 1,006 16.0 11.7 10.7 587 660 737 16.1 12.5 11.7
EMS (5) 77 105 140 42.2 36.8 33.3 9 14 20 29.1 47.9 41.3 6 9 14 42.6 54.1 46.5
Financials (53) 15,080 17,236 19,737 9.1 14.3 14.5 6,285 7,662 9,246 17.1 21.9 20.7 3,868 4,666 5,677 18.0 20.6 21.7
Banks-PVT (13) 3,383 4,014 4,775 21.6 18.7 19.0 2,523 3,056 3,695 20.6 21.1 20.9 1,702 2,040 2,456 27.3 19.9 20.4
Banks-PSU (6) 3,409 3,793 4,261 11.7 11.3 12.3 2,145 2,584 2,974 6.4 20.5 15.1 1,232 1,560 1,877 27.6 26.6 20.4
Insurance (7) 7,006 7,849 8,786 0.8 12.0 11.9 676 852 1,139 33.4 26.1 33.7 367 369 485 -14.8 0.7 31.4
NBFC - Lending (21) 1,153 1,426 1,737 22.8 23.7 21.8 874 1,084 1,338 23.7 24.1 23.4 519 639 791 1.5 23.1 23.7
NBFC-Non Lending (6) 129 154 177 34.7 18.9 15.5 68 86 101 36.6 27.4 17.2 48 58 68 45.3 21.0 17.5
Healthcare (23) 3,039 3,384 3,795 13.7 11.3 12.2 677 782 881 22.1 15.4 12.6 408 487 565 24.2 19.4 16.1
Infrastructure (3) 190 216 237 4.0 13.8 9.7 52 59 66 -2.0 15.1 11.6 19 23 26 -4.9 21.6 14.9
Logistics (7) 553 646 749 17.9 16.7 16.0 199 233 271 19.9 17.0 16.3 109 130 157 12.2 18.5 21.4
Media (3) 192 217 244 23.6 13.2 12.5 45 55 65 18.2 22.9 18.9 25 32 39 22.8 26.9 22.0
Metals (10) 11,270 12,255 13,321 -1.2 8.7 8.7 1,693 2,086 2,328 -7.0 23.2 11.6 754 1,012 1,164 -9.5 34.2 15.0
Oil & Gas (15) 35,566 39,889 42,299 -4.1 12.2 6.0 4,465 4,305 4,646 49.2 -3.6 7.9 2,348 2,169 2,385 72.1 -7.6 10.0
Ex OMCs (12) 18,969 20,783 22,107 -2.9 9.6 6.4 3,116 3,371 3,696 17.0 8.2 9.6 1,527 1,670 1,899 17.8 9.3 13.7
Real Estate (10) 475 571 611 18.0 20.2 6.9 143 181 211 30.7 26.3 16.8 100 142 155 26.0 41.8 9.5
Retail (18) 1,756 2,105 2,541 20.3 19.9 20.7 217 278 343 14.7 27.8 23.4 97 133 173 10.9 36.9 29.9
Staffing (3) 418 491 578 14.8 17.6 17.8 15 20 23 23.5 34.8 16.3 8 13 15 33.6 51.8 18.2
Technology (12) 7,353 8,060 9,023 5.1 9.6 12.0 1,634 1,857 2,168 3.2 13.6 16.8 1,118 1,284 1,509 3.9 14.9 17.5
Telecom (4) 2,445 2,663 2,910 7.5 8.9 9.3 1,151 1,272 1,419 12.8 10.6 11.5 -125 1 77 Loss LP 9,917
Others (18) 2,734 3,148 3,549 4.9 15.1 12.7 421 524 620 19.4 24.4 18.3 195 278 352 37.1 42.7 26.7
MOFSL (258) 1,01,493 1,13,479 1,24,546 4.0 11.8 9.8 20,147 22,931 26,364 21.1 13.8 15.0 10,815 12,542 14,799 27.2 16.0 18.0
MOFSL Ex OMCs (255) 84,897 94,373 1,04,354 6.0 11.2 10.6 18,799 21,997 25,414 15.2 17.0 15.5 9,995 12,043 14,313 18.5 20.5 18.8
For Banks: Sales = Net Interest Income, EBIDTA = Operating Profits.
Valuations - MOFSL universe
PE (x) PB (x) EV/EBIDTA (x) ROE (%) EARN. CAGR
Sector FY24E FY25E FY26E FY24E FY25E FY26E FY24E FY25E FY26E FY24E FY25E FY26E (FY23-FY25)
Auto (24) 24.2 21.5 18.8 4.8 4.0 3.5 12.0 10.3 8.8 20.0 18.8 18.5 44.5
Capital Goods (11) 43.4 35.1 29.0 6.9 6.0 5.3 27.2 22.3 18.9 15.8 17.2 18.1 26.7
Cement (11) 36.3 30.9 26.2 3.7 3.2 3.0 23.5 19.0 16.2 10.2 10.5 11.4 22.8
Chemicals-Specialty (9) 51.3 40.1 33.3 6.7 5.9 5.1 33.8 26.6 22.2 13.0 14.6 15.3 -0.4
Consumer (19) 50.2 44.6 40.0 13.1 12.4 11.6 35.7 31.8 28.7 26.1 27.8 29.2 14.3
EMS (5) 77.0 49.9 34.1 8.1 7.0 5.8 47.9 32.4 22.7 10.6 14.0 17.1 48.2
Financials (53) 16.3 13.5 11.1 2.6 2.2 1.9 N.M N.M N.M 15.7 16.4 17.1 19.3
Banks-PVT (13) 18.3 15.2 12.7 2.8 2.4 2.1 N.M N.M N.M 15.2 15.8 16.4 23.5
Banks-PSU (6) 8.3 6.5 5.4 1.2 1.1 0.9 N.M N.M N.M 14.8 16.4 17.0 27.1
Insurance (7) 28.3 28.1 21.4 7.6 6.1 4.8 N.M N.M N.M 27.0 21.8 22.7 -7.4
NBFC - Lending (21) 19.2 15.6 12.6 2.8 2.4 2.1 N.M N.M N.M 14.4 15.4 16.3 11.8
NBFC - Non Lending (6) 28.2 23.3 19.8 9.3 8.1 7.1 N.M N.M N.M 33.1 34.9 35.6 32.6
Healthcare (23) 33.4 28.0 24.1 4.4 3.9 3.5 20.1 17.1 14.9 13.3 14.0 14.3 21.8
Infrastructure (3) 23.0 18.9 16.5 1.9 1.7 1.6 9.7 8.2 7.7 8.2 9.2 9.6 7.5
Logistics (7) 29.0 24.5 20.2 4.5 4.0 3.5 17.8 15.0 12.6 15.6 16.3 17.3 15.3
Media (3) 28.1 22.2 18.2 2.5 2.4 2.2 16.4 14.1 11.6 9.0 10.8 12.2 24.8
Metals (10) 15.9 11.8 10.3 2.3 2.1 1.8 8.4 6.7 5.9 14.4 17.4 17.9 10.2
Oil & Gas (15) 11.5 12.5 11.3 1.6 1.5 1.4 7.6 7.6 6.7 14.3 12.0 12.1 26.1
Ex OMCs (12) 15.5 14.2 12.5 1.7 1.6 1.4 9.0 8.0 7.0 11.2 11.2 11.6 13.5
Real Estate (10) 52.1 36.7 33.5 4.8 4.3 3.8 38.1 30.0 25.0 9.2 11.7 11.4 33.6
Retail (18) 97.3 71.1 54.7 15.5 13.3 11.1 44.4 34.7 27.9 15.9 18.6 20.3 23.2
Staffing (3) 23.8 15.7 13.3 3.2 2.7 2.3 13.8 9.9 8.1 13.4 17.4 17.5 42.4
Technology (12) 30.1 26.2 22.3 8.8 8.8 8.6 19.8 17.5 15.0 29.4 33.5 38.6 9.2
Telecom (4) -61.1 9,949.8 99.3 24.9 25.1 20.2 9.3 8.1 6.6 -40.8 0.3 20.4 LP
Others (18) 43.7 30.6 24.2 5.3 4.6 4.0 21.3 16.9 14.0 12.2 15.2 16.6 39.9
MOFSL (258) 23.5 20.3 17.2 3.7 3.3 2.9 10.0 8.7 7.4 15.8 16.3 17.0 21.5
MOFSL Ex OMCs (255) 25.1 20.8 17.5 3.8 3.4 3.0 10.4 8.8 7.4 15.2 16.3 17.1 19.5
N.M.: Not Meaningful

January 2024 28
 On a roll!

Ready reckoner: Quarterly performance

SALES (INR M) EBDITA (INR M) NET PROFIT (INR M)
CMP
RECO Var Var Var Var Var Var
Sector (INR) Dec-23 Dec-23 Dec-23
% YoY % QoQ % YoY % QoQ % YoY % QoQ
Amara Raja Energy 825 Neutral 28,482 8.0 1.3 3,845 -3.1 -0.6 2,127 -4.6 -0.8
Apollo Tyres 453 Buy 63,500 -1.1 1.1 11,170 22.3 -3.7 4,368 49.6 -9.5
Ashok Leyland 186 Buy 91,800 1.7 -4.8 9,598 20.4 -11.1 4,893 37.1 -15.2
Bajaj Auto 6701 Neutral 1,20,967 29.9 12.2 24,255 36.5 13.7 20,447 37.1 11.4
Balkrishna Inds 2574 Neutral 23,336 5.3 3.9 5,717 35.1 4.3 3,546 256.4 5.9
Bharat Forge 1247 Buy 23,429 20.0 4.2 6,392 29.5 3.7 3,737 30.7 7.5
Bosch 22417 Neutral 42,089 15.0 1.9 4,863 20.5 -1.0 3,830 20.1 -4.8
CEAT 2431 Buy 29,999 10.0 -1.7 4,365 83.7 -4.3 1,778 397.9 -14.5
CIE Automotive 496 Buy 24,570 9.4 7.8 3,797 29.9 9.9 2,212 32.9 18.5
Craftsman Auto 5330 Buy 12,103 61.6 2.6 2,509 58.5 5.6 1,001 94.0 5.9
Eicher Motors 4035 Neutral 40,217 8.1 -2.3 10,899 27.1 0.3 9,646 30.2 -5.1
Endurance Tech. 1915 Buy 26,324 25.6 3.4 3,461 44.5 9 1,758 62.4 13.7
Escorts Kubota 2967 Neutral 24,920 10.1 21.8 3,583 88.2 36.1 3,036 62.9 29.2
Exide Inds. 322 Buy 40,946 20.0 -0.3 4,729 17.9 -2.1 2,699 20.9 -5.9
Hero Motocorp 4116 Buy 96,375 20.0 2.0 13,421 45.2 1.0 10,392 46.2 -1.4
Mahindra & Mahindra 1704 Buy 2,55,002 17.8 4.9 32,426 15.2 5.8 23,316 14.9 -32.5
Maruti Suzuki 10282 Buy 3,34,717 15.2 -9.7 40,678 43.6 -15.0 30,721 30.7 -17.3
Samvardhana Motherson 106 Buy 2,53,565 25.1 8.0 23,531 45.6 24.6 8,595 89.1 90.6
Motherson Wiring 62 Buy 20,415 21.0 -3.0 2,551 42.5 2.8 1,628 53.4 4.5
MRF 129439 Sell 61,438 11.0 0.9 11,208 104.3 -0.7 5,556 228.4 -2.9
Sona BLW Precis. 645 Neutral 7,818 14.1 -1.1 2,173 16.8 -2.7 1,258 17.4 -2.2
Tata Motors 791 Buy 10,73,922 21.4 2.2 1,37,579 42.7 0.2 35,078 18.6 -9.1
Tube Investments 3576 Buy 20,402 19.3 3.6 2,696 25.8 7.3 1,882 36.7 3.7
TVS Motor 2019 Neutral 82,618 26.2 1.4 9,464 43.6 5.2 5,470 55.1 2.0
Automobiles 27,98,953 18.6 1.4 3,74,911 37.8 0.9 1,88,978 35.4 -7.7
ABB India 4679 Buy 31,866 31.3 15.1 3,518 -3.4 -19.8 2,992 -2.0 -17.3
Bharat Electronics 185 Neutral 51,378 24.4 28.7 11,560 35.4 15.1 7,907 32.1 -2.7
Cummins India 1955 Buy 22,048 1.1 16.1 3,391 -17.7 0.1 3,108 -13.7 -5.4
Hitachi Energy 5460 Sell 13,361 29.2 8.8 930 135.8 42.4 456 895.3 84.3
KEC International 606 Neutral 52,631 20.3 17.0 3,526 76.4 28.6 1,143 548.5 104.9
Kalpataru Proj. 716 Buy 42,554 21.3 10.7 3,447 13.0 11.9 1,326 19.5 17.4
Kirloskar Oil 663 Buy 11,529 15.3 8.9 1,257 15.4 27.4 820 20.3 40.0
Larsen & Toubro 3522 Buy 5,38,430 16.1 5.5 61,996 22.2 10.1 34,696 41.2 7.7
Siemens 4025 Buy 56,996 17.0 1.8 7,322 29.3 2.2 5,787 27.0 2.1
Thermax 3087 Neutral 23,740 15.8 3.1 2,035 26.3 -0.6 1,450 14.5 -8.7
Triveni Turbine 420 Buy 4,259 30.7 9.8 827 31.0 11.2 660 25.4 3.0
Capital Goods 8,48,791 17.4 8.0 99,809 22.5 9.0 60,346 32.4 4.6
ACC 2244 Neutral 45,234 -0.3 2.0 6,753 78.5 23.1 3,898 130.7 1.4
Ambuja Cements 535 Neutral 42,638 3.3 7.4 9,578 53.0 23.8 6,400 54.3 -0.6
Birla Corporation 1498 Buy 23,657 17.3 3.5 3,630 151.4 25.7 1,025 LP 75.0
Dalmia Bharat 2361 Buy 34,881 4.0 10.8 7,443 15.6 26.4 2,169 7.9 82.3
Grasim Industries 2126 Buy 64,532 4.2 0.2 5,791 21.4 -2.4 1,991 23.7 -75.0
India Cements 261 Sell 12,587 3.2 3.0 895 LP 1,005.2 -130 Loss Loss
J K Cements 3821 Buy 29,460 20.9 7.0 5,838 136.0 25.0 2,325 496.3 29.4
JK Lakshmi Cem. 899 Buy 15,910 1.9 1.0 2,564 38.4 18.0 1,195 54.3 24.6
Ramco Cements 1014 Neutral 22,532 12.2 -3.3 4,410 54.9 10.6 1,307 94.0 29.1
Shree Cement 28462 Neutral 50,707 24.6 10.6 11,344 60.2 30.4 5,582 101.7 13.6
Ultratech Cement 10461 Buy 1,68,116 8.3 5.0 33,775 44.6 32.4 19,145 80.9 49.4
Cement 5,10,255 8.5 4.7 92,021 54.4 26.0 44,907 97.7 10.4
Alkyl Amines 2701 Neutral 3,369 -13.3 -4.3 456 -34.4 -5.5 267 -41.6 -2.0
Atul 7145 Neutral 11,041 -12.9 -7.5 1,102 -36.1 -29.0 565 -45.1 -38.0
Clean Science 1591 Neutral 1,995 -16.0 10.1 895 -17.3 19.6 624 -25.5 19.5
Deepak Nitrite 2475 Neutral 18,467 -7.3 3.9 3,571 13.5 18.1 2,500 19.6 21.9
Fine Organic 4961 Sell 4,451 -40.6 -5.7 917 -47.5 -12.1 702 -46.5 -11.6
Galaxy Surfactants 2775 Buy 9,691 -10.3 -1.4 1,336 -13.3 7.0 860 -19.0 11.1
Navin Fluorine 3857 Neutral 5,557 -1.4 17.8 1,268 -18.5 28.9 661 -38.0 9.1
NOCIL 274 Neutral 3,683 13.1 5.0 546 48.6 23.7 350 86.3 30.1
Vinati Organics 1755 Buy 4,185 -17.7 -6.6 879 -46.3 -20.7 649 -48.3 -22.9
Chemicals-Specialty 62,437 -12.2 0.2 10,969 -18.7 3.2 7,178 -22.8 1.9

January 2024 29
 On a roll!

Ready reckoner: Quarterly performance

SALES (INR M) EBDITA (INR M) NET PROFIT (INR M)
CMP
RECO Var Var Var Var Var Var
Sector (INR) Dec-23 Dec-23 Dec-23
% YoY % QoQ % YoY % QoQ % YoY % QoQ
Asian Paints 3395 Neutral 94,831 9.8 11.8 18,351 13.9 6.9 12,343 12.5 0.2
Britannia 5316 Neutral 43,899 4.6 -1.0 8,444 3.3 -3.2 5,699 2.6 -3.0
Colgate 2482 Neutral 13,744 6.4 -6.6 4,230 17.0 -12.3 2,882 18.5 -15.2
Dabur 558 Buy 32,745 7.6 2.2 6,803 11.5 -2.4 5,271 10.2 -6.2
Emami 573 Buy 10,132 3.1 17.1 3,050 3.6 30.5 2,754 7.4 35.4
Godrej Consumer 1145 Buy 36,349 1.0 0.9 7,924 3.2 9.5 5,598 1.1 25.7
Hind. Unilever 2656 Buy 1,58,971 4.4 4.1 39,045 10.4 5.7 28,195 9.2 5.7
Indigo Paints 1492 Buy 3,406 21.1 22.1 576 41.9 36.6 357 35.9 40.8
ITC 467 Buy 1,71,560 5.7 3.7 63,946 2.8 5.8 50,733 0.8 3.0
Jyothy Labs 483 Neutral 6,788 10.8 -7.3 1,242 47.3 -8.2 914 35.6 -12.1
Marico 542 Buy 24,206 -2.0 -2.2 5,059 10.9 1.8 3,602 9.8 2.1
Nestle 2737 Neutral 47,250 11.0 -6.2 11,387 16.6 -7.3 7,578 19.9 -5.9
P&G Hygiene 17373 Neutral 12,398 9.0 8.9 3,200 10.2 12.3 2,380 14.5 13.0
Page Industries 38771 Neutral 13,211 8.0 17.4 2,695 39.8 15.4 1,779 43.8 18.4
Pidilite Inds. 2697 Neutral 32,314 7.8 5.1 7,506 51.4 10.4 5,028 64.2 9.3
Tata Consumer 1080 Buy 37,724 8.6 1.0 5,214 14.9 -2.9 3,407 16.4 -2.4
United Breweries 1792 Sell 18,140 12.6 -3.9 2,135 178.5 15.6 1,243 449.2 15.5
United Spirits 1106 Neutral 29,340 5.5 2.4 4,254 15.7 -9.5 2,646 18.4 -16.9
Varun Beverages 1242 Buy 26,737 20.8 -30.9 4,106 33.5 -53.5 1,363 82.3 -72.8
Consumer 8,13,745 6.7 1.6 1,99,167 10.9 1.4 1,43,773 9.7 0.2
Avalon Tech 544 Buy 2,676 15.0 33.1 256 26.7 103.0 144 150.8 97.6
Cyient DLM 675 Buy 3,216 50.0 10.2 292 41.2 23.9 146 154.9 -0.7
Data Pattern 1840 Neutral 1,398 25.0 29.0 539 14.6 32.3 374 12.3 10.8
Kaynes Tech 2669 Buy 4,915 70.0 36.2 703 70.8 44.1 446 95.1 38.0
Syrma SGS Tech. 660 Buy 7,946 55.0 11.6 650 36.0 32.7 355 6.9 19.5
EMS 20,150 48.1 20.4 2,440 37.9 39.6 1,464 45.3 24.4
Ajanta Pharma 2154 Buy 10,292 5.9 0.1 2,686 24.2 -7.6 1,917 17.6 2.9
Alembic Pharma 765 Neutral 15,913 5.5 -0.2 2,323 -6.6 11.6 1,470 11.0 7.3
Alkem Lab 5123 Neutral 32,422 6.6 -5.8 5,901 -1.5 -21.0 4,522 -0.6 -33.0
Apollo Hospitals 5748 Buy 47,092 10.5 -2.8 5,934 17.4 -5.4 2,361 53.8 1.9
Aurobindo Pharma 1080 Neutral 73,284 14.4 1.5 15,243 59.7 8.6 8,231 70.8 5.8
Biocon 256 Neutral 36,898 25.5 6.6 8,560 24.2 15.5 2,120 -4.8 46.6
Cipla 1251 Buy 64,769 11.5 -3.0 15,544 10.4 -10.3 9,700 21.1 -17.4
Divis Labs 3913 Neutral 20,331 19.1 6.5 5,652 38.4 13.3 4,048 47.8 14.1
Dr Reddy’ s Labs 5819 Neutral 68,720 1.5 -0.1 19,104 -7.1 -4.3 12,112 -7.6 -8.8
Eris Lifescience 905 Neutral 4,867 15.0 -3.7 1,738 26.7 -4.1 1,093 7.6 -11.5
Gland Pharma 1907 Buy 14,178 51.1 3.2 3,459 19.5 6.7 2,335 0.7 20.3
Glenmark Pharma 856 Neutral 32,390 -6.5 1.0 5,409 -12.8 7.1 1,965 -11.7 40.7
Global Health 951 Buy 8,262 19.0 -2.1 2,074 27.5 -5.1 1,225 52.0 -2.2
Granules India 412 Buy 12,305 7.4 3.4 2,399 3.7 12.7 1,295 4.2 26.9
GSK Pharma 1953 Neutral 8,586 7.0 -10.3 2,215 -3.1 -23.5 1,734 -1.5 -20.3
IPCA Labs. 1119 Neutral 21,209 37.2 4.3 3,351 44.5 -7.1 1,562 31.5 -7.6
Laurus Labs 433 Buy 14,170 -8.3 15.7 3,273 -18.9 74.2 1,462 -28.0 295.6
Lupin 1313 Sell 48,384 11.9 -4.0 8,467 52.3 -8.3 4,181 148.3 -15.4
Max Healthcare 688 Buy 16,690 14.0 -2.9 4,590 13.3 -5.2 3,541 24.8 0.3
Piramal Pharma 139 Buy 20,043 16.8 4.9 3,067 156.1 15.4 821 LP 1,536.2
Sun Pharma 1260 Buy 1,22,687 11.6 2.2 31,530 14.1 4.3 25,037 20.5 4.1
Torrent Pharma 2296 Neutral 27,405 10.0 3.0 8,742 18.3 6.0 4,408 37.7 14.2
Zydus Lifesciences 698 Neutral 43,961 3.3 0.6 10,353 15.1 -2.7 6,619 14.1 -10.3
Healthcare 7,64,857 10.5 0.5 1,71,616 15.4 0.3 1,03,759 20.3 -1.2
G R Infraproject 1132 Buy 18,783 -1.1 19.3 2,667 -3.7 37.7 1,729 -0.7 40.3
IRB Infra 42 Neutral 18,219 20.3 4.4 8,350 12.1 5.1 1,790 26.6 86.9
KNR Constructions 258 Buy 9,183 10.6 -2.5 1,644 5.3 -1.1 990 27.4 -0.9
Infrastructure 46,185 8.8 8.4 12,661 7.5 9.7 4,509 14.7 41.4
Adani Ports 1048 Buy 68,620 43.4 3.2 40,486 34.4 4.3 21,172 36.2 -4.6
Blue Dart Express 7332 Buy 14,039 5.0 6.0 1,481 -1.6 13.5 841 -3.3 17.9
Concor 861 Buy 23,716 19.3 8.3 5,526 29.6 2.9 3,585 20.9 0.2
Mahindra Logistics 392 Neutral 14,849 11.7 8.8 646 3.0 20.6 -3 PL Loss
TCI Express 1379 Buy 3,400 8.1 6.3 554 20.3 9.9 391 22.0 9.8

January 2024 30
 On a roll!

Ready reckoner: Quarterly performance

SALES (INR M) EBDITA (INR M) NET PROFIT (INR M)
CMP
RECO Var Var Var Var Var Var
Sector (INR) Dec-23 Dec-23 Dec-23
% YoY % QoQ % YoY % QoQ % YoY % QoQ
Transport Corp. 831 Buy 10,394 7.5 4.6 1,094 -4.4 8.9 893 4.2 2.7
VRL Logistics 763 Buy 7,733 13.5 9.0 1,083 4.8 17.9 335 -11.3 72.2
Logistics 1,42,752 25.2 5.4 50,869 29.9 5.0 27,214 29.9 -1.9
PVR Inox 1660 Neutral 15,074 60.2 -24.6 1,834 42.8 -57.1 232 -7.9 -88.8
Sun TV 710 Buy 8,973 4.6 -11.9 5,870 2.4 -18.0 3,905 -6.2 -14.4
Zee Entertainment 285 Buy 20,806 -1.3 -14.7 2,126 -41.9 -36.1 934 -28.8 -45.9
Media 44,853 14.8 -17.8 9,830 -7.9 -33.4 5,072 -11.4 -39.4
Coal India 382 Buy 3,47,929 -1.1 6.2 84,831 -24.5 -4.6 56,651 -27.0 -16.7
Hindalco 609 Buy 5,07,567 -4.5 -6.3 61,630 73.7 9.8 28,811 111.5 33.1
Hindustan Zinc 318 Neutral 74,663 -5.1 9.9 33,630 -9.3 7.1 18,230 -15.4 5.4
JSPL 743 Buy 1,19,088 -4.4 -2.8 21,251 -10.6 -7.0 8,763 -2.3 -36.9
JSW Steel 877 Neutral 4,11,389 5.1 -7.7 65,899 44.9 -16.4 21,014 328.8 -31.5
Nalco 136 Neutral 32,538 -1.1 6.9 4,781 4.0 20.6 2,359 -8.0 25.9
NMDC 212 Buy 48,478 30.3 20.8 14,738 29.2 23.8 12,352 35.4 20.3
SAIL 125 Neutral 2,60,691 4.1 -6.8 21,369 2.8 0.5 2,552 4.7 -26.0
Tata Steel 140 Neutral 6,14,167 7.6 10.3 50,170 23.9 17.6 5,748 LP -18.2
Vedanta 257 Neutral 3,36,764 -1.2 -1.5 66,669 -5.7 -0.8 9,744 -37.6 99.7
Metals 27,53,273 1.6 0.0 4,24,968 5.7 0.0 1,66,224 25.5 -7.1
Aegis Logistics 349 Neutral 18,347 -12.1 48.6 2,191 1.4 5.2 1,309 4.4 3.1
BPCL 452 Neutral 10,03,541 -15.8 -2.6 63,227 44.5 -51.4 32,668 66.7 -61.6
Castrol India 191 Buy 12,592 7.1 6.4 2,965 18.3 10.4 2,163 11.9 11.2
GAIL 166 Buy 3,54,012 0.1 11.2 34,728 1,228.9 -0.5 24,176 883.8 0.5
Gujarat Gas 484 Buy 40,542 10.0 5.4 5,082 -12.7 2.3 3,028 -18.4 1.7
Gujarat State Petronet 320 Buy 4,438 27.4 -2.1 3,749 38.9 -8.6 2,563 49.9 -51.8
HPCL 400 Neutral 9,55,678 -12.8 -0.1 31,357 51.1 -61.4 12,211 608.2 -76.1
Indraprastha Gas 421 Sell 33,626 -9.4 -2.8 6,650 55.2 1.2 4,576 64.5 -14.4
IOC 130 Buy 17,59,669 -14.1 -2.1 72,570 37.1 -66.0 23,832 432.0 -81.6
Mahanagar Gas 1204 Buy 15,366 -8.1 -2.2 4,488 75.2 -6.3 3,150 83.1 -6.9
MRPL 133 Neutral 2,34,313 -11.8 21.8 16,592 209.7 -26.0 7,272 LP -31.4
Oil India 378 Buy 60,280 2.5 1.9 22,964 -19.6 -7.7 14,659 -16.0 -23.2
ONGC 205 Buy 3,49,919 -9.3 -0.5 1,79,026 -12.3 -2.5 91,471 -17.2 -10.5
Petronet LNG 226 Neutral 1,32,295 -16.1 5.6 12,546 -25.1 3.3 8,240 -30.2 0.7
Reliance Inds. 2590 Buy 24,01,749 10.6 3.6 4,11,051 16.6 0.3 1,76,294 11.6 1.4
Oil & Gas 73,76,366 -6.1 1.5 8,69,187 16.3 -23.6 4,07,613 20.9 -34.7
Oil Ex OMCs 36,57,477 3.9 5.0 7,02,032 11.5 -1.5 3,38,902 8.9 -5.4
Brigade Enterpr. 896 Buy 10,201 24.4 -25.4 2,673 28.6 -17.7 968 70.1 -27.5
DLF 724 Neutral 19,729 32.0 46.4 7,183 50.5 55.4 8,491 63.6 36.5
Godrej Properties 2001 Buy 1,095 -44.2 -68.1 -1,244 Loss Loss 470 -16.6 -35.3
Macrotech Developers 1050 Buy 28,067 58.2 60.4 6,789 68.2 63.2 4,202 40.1 100.1
Mahindra Lifespace 545 Buy 288 -84.6 62.2 -706 Loss Loss -279 Loss Loss
Oberoi Realty 1448 Neutral 11,310 -30.6 -7.1 5,671 -39.7 -11.1 4,000 -43.1 -12.4
Phoenix Mills 2253 Neutral 9,296 35.9 6.2 5,677 47.6 10.5 2,759 56.4 5.9
Prestige Estates 1185 Buy 24,018 3.7 7.4 6,660 16.0 12.4 1,936 51.5 4.3
Sobha 1023 Buy 9,246 6.5 24.7 970 9.3 28.6 332 4.5 122.3
Sunteck Realty 448 Buy 459 -48.7 83.7 -293 PL Loss -516 PL Loss
Real Estate 1,13,709 13.0 14.6 33,381 8.9 14.6 22,363 13.4 16.3
Aditya Birla Fashion 226 Neutral 39,120 9.0 21.2 4,665 7.1 44.3 -514 PL Loss
Avenue Supermarts 4066 Buy 1,35,911 17.5 7.7 11,323 17.3 12.7 7,141 21.1 14.6
Barbeque Nation 667 Neutral 3,332 1.5 10.4 550 -11.3 23.9 -36 PL Loss
Bata India 1638 Neutral 9,496 5.5 15.9 2,545 23.5 40.1 1,166 40.3 81.8
Campus Activewear 285 Buy 4,945 6.2 91.2 1,199 30.5 390.1 715 48.0 22,250.9
Devyani Intl. 192 Buy 8,737 10.5 6.6 1,766 1.6 11.3 401 -49.8 31.9
Jubilant Foodworks 562 Buy 14,878 13.0 10.6 3,677 26.8 31.0 1,377 55.5 90.9
Metro Brands 1246 Buy 7,207 20.4 29.7 2,396 16.8 54.3 1,300 15.0 93.7
Raymond 1738 Buy 24,087 11.1 6.9 3,591 12.5 14.1 2,069 98.1 18.1
Relaxo Footwear 901 Neutral 7,464 9.6 4.3 903 25.1 -1.3 389 29.4 -11.9
Restaurant Brands 115 Buy 4,536 22.7 0.0 687 43.6 8.4 -40 Loss Loss
Sapphire Foods 1409 Buy 6,763 13.5 5.2 1,240 6.3 7.7 204 -37.5 34.4
Shoppers Stop 684 Neutral 11,918 5.3 16.3 2,235 5.4 39.9 512 -17.5 666.0

January 2024 31
 On a roll!

Ready reckoner: Quarterly performance

SALES (INR M) EBDITA (INR M) NET PROFIT (INR M)
CMP
RECO Var Var Var Var Var Var
Sector (INR) Dec-23 Dec-23 Dec-23
% YoY % QoQ % YoY % QoQ % YoY % QoQ
Titan Company 3675 Buy 1,45,286 25.1 16.0 17,659 31.1 25.2 12,419 36.2 35.7
Trent 3000 Buy 34,744 60.0 20.2 5,907 76.0 28.2 3,191 98.3 10.2
V-Mart Retail 2022 Neutral 8,890 14.4 61.8 986 -4.9 14,610.4 84 -58.1 LP
Vedant Fashions 1277 Neutral 5,062 14.7 131.9 2,622 16.8 182.6 1,743 16.0 257.8
Westlife Foodworld 819 Neutral 6,546 7.1 6.5 1,080 5.7 10.0 305 -16.2 36.2
Retail 4,78,923 19.4 14.5 65,032 22.5 30.5 32,425 29.1 55.2
Quess Corp 519 Neutral 51,139 14.5 7.7 1,943 33.5 18.8 965 179.5 31.2
SIS 465 Buy 32,108 10.6 4.5 1,548 22.5 7.2 989 -4.3 31.4
Team Lease Serv. 3254 Buy 24,019 19.6 5.7 384 21.5 21.0 359 23.8 30.1
Staffing 1,07,266 14.4 6.3 3,876 27.7 14.1 2,313 38.5 31.1
Coforge 6190 Neutral 23,321 13.4 2.5 4,035 11.6 16.2 2,677 17.3 48.0
Cyient 2298 Buy 18,393 13.7 3.4 3,421 22.8 5.0 2,015 23.8 10.0
HCL Technologies 1483 Buy 2,80,369 5.0 5.1 60,397 -4.4 2.3 40,303 -1.6 5.2
Infosys 1551 Buy 3,85,173 0.5 -1.2 95,571 -6.3 -5.1 61,630 -6.4 -0.8
LTIMindtree 6266 Neutral 90,467 5.0 1.6 16,194 11.3 -0.7 11,535 6.7 -0.8
L&T Technology 5207 Buy 24,295 18.6 1.8 4,908 11.2 3.2 3,462 14.0 9.8
MphasiS 2732 Neutral 33,254 -5.2 1.5 5,686 -7.9 -4.5 3,795 -8.0 -3.2
Persistent Systems 7322 Neutral 24,987 15.2 3.6 4,248 5.8 4.8 2,680 0.1 1.8
TCS 3811 Buy 5,96,662 2.5 0.0 1,58,478 1.7 0.9 1,16,462 7.0 2.3
Tech Mahindra 1298 Neutral 1,27,792 -7.0 -0.7 13,674 -36.2 -2.8 7,872 -39.3 -19.5
Wipro 477 Neutral 2,20,694 -5.0 -2.0 38,650 -16.4 -7.2 24,916 -18.4 -5.8
Zensar Tech 608 Neutral 11,938 -0.3 -3.8 1,922 42.5 -16.7 1,237 61.7 -28.8
Technology 18,37,346 1.3 0.4 4,07,183 -4.3 -1.3 2,78,582 -2.1 0.5
Bharti Airtel 1013 Buy 3,80,156 6.2 2.6 2,01,145 9.0 3.1 29,883 49.9 1.0
Indus Towers 203 Neutral 72,512 7.2 1.7 34,613 197.7 1.2 12,375 LP -4.4
Tata Comm 1767 Neutral 57,368 26.7 17.7 10,386 -3.6 2.3 3,173 -19.4 43.4
Vodafone Idea 17 Neutral 1,07,436 1.2 0.3 43,202 3.3 0.9 -68,565 Loss Loss
Telecom 6,17,471 7.0 3.3 2,89,345 16.3 2.5 -23,134 Loss Loss
APL Apollo Tubes 1526 Buy 42,308 -2.2 -8.6 2,790 2.3 -14.2 1,691 0.0 -16.6
Coromandel International 1245 Buy 63,508 -23.6 -9.1 5,443 -30.3 -48.6 3,544 -32.7 -53.2
EPL 201 Buy 10,229 8.3 2.1 1,919 28.8 6.0 659 5.0 30.6
Godrej Agrovet 558 Neutral 23,313 0.3 -9.3 1,422 4.4 -29.4 626 -2.2 -40.5
Havells India 1361 Buy 44,203 7.3 13.3 4,468 5.4 19.7 3,060 7.8 22.9
Indiamart Inter. 2725 Buy 3,090 22.9 4.9 867 23.5 8.4 753 23.0 8.5
Indian Hotels 436 Buy 19,134 13.5 33.5 7,084 18.6 99.7 4,189 9.5 150.9
Info Edge 5148 Neutral 5,982 7.7 0.9 2,318 6.9 -3.9 1,989 LP -9.1
Interglobe Aviation 2976 Neutral 1,92,594 29.0 28.9 46,933 47.4 96.2 24,607 73.5 1,209.9
Kajaria Ceramics 1309 Buy 11,510 5.5 2.6 1,807 35.8 0.6 1,095 47.3 1.4
Lemon Tree Hotel 119 Buy 2,963 26.9 30.4 1,446 14.3 42.0 408 2.0 80.0
One 97 Comm. 646 Buy 27,260 32.1 8.2 -1,829 Loss Loss -2,632 Loss Loss
P I Industries 3475 Buy 18,839 16.8 -11.0 4,705 13.4 -14.7 3,513 -0.2 -26.9
SRF 2467 Neutral 32,741 -5.6 3.0 6,368 -25.0 -1.3 3,026 -42.5 -5.4
Tata Chemicals 1118 Neutral 38,207 -7.9 -4.4 7,674 -16.8 -6.3 2,478 -37.7 -29.5
UPL 592 Neutral 1,00,598 -26.5 -1.1 10,326 -66.0 -34.4 -556 PL PL
Voltas 978 Buy 24,321 21.3 6.1 1,129 47.9 60.7 814 201.0 121.9
Zomato 125 Buy 30,860 58.4 8.4 170 LP LP 784 LP 117.8
Others 6,91,659 2.2 6.7 1,05,041 -1.7 18.4 50,047 2.1 57.5
PL: Profit to Loss; LP: Loss to Profit

January 2024 32
 On a roll!

Ready reckoner: Quarterly performance

NII (INR M) OP. PROFITS (INR M) NET PROFIT (INR M)
CMP
RECO Var Var Var Var Var Var
(INR) Dec-23 Dec-23 Dec-23
% YoY % QoQ % YoY % QoQ % YoY % QoQ
Financials
AU Small Finance 786 Buy 13,211 14.6 5.8 6,648 19.6 2.6 4,189 6.6 4.2
Axis Bank 1098 Buy 1,27,102 10.9 3.2 90,824 -2.1 5.2 60,822 3.9 3.7
Bandhan Bank 244 Neutral 25,794 24.0 5.6 17,395 -9.5 9.9 7,898 171.8 9.5
DCB Bank 145 Neutral 4,908 10.0 3.2 2,299 18.5 9.2 1,348 18.4 6.3
Equitas Small Fin. 107 Buy 7,895 21.9 3.1 3,521 26.1 6.6 2,053 20.7 3.6
Federal Bank 157 Buy 21,551 10.2 4.8 13,932 9.3 5.2 9,455 17.7 -0.9
HDFC Bank 1701 Buy 2,91,423 26.8 6.4 2,40,169 26.2 5.8 1,62,416 32.5 1.7
ICICI Bank 1001 Buy 1,84,917 12.3 1.0 1,41,432 6.6 -0.6 99,850 20.1 -2.7
IDFC First Bank 88 Neutral 41,786 27.2 5.8 16,020 27.1 6.1 7,768 28.5 3.4
IndusInd Bank 1600 Buy 52,935 17.8 4.3 40,720 10.5 4.2 23,292 18.6 5.8
Kotak Mahindra Bank 1911 Neutral 65,144 15.2 3.5 48,313 25.5 4.8 33,578 20.3 5.2
RBL Bank 285 Neutral 15,205 19.1 3.1 7,840 38.2 7.3 3,161 51.3 7.5
SBI Cards 766 Buy 13,527 18.2 4.3 15,778 29.6 1.7 6,000 17.8 -0.5
Banks-Private 8,65,398 18.5 4.1 6,44,892 14.4 4.1 4,21,829 23.1 1.5
Bank of Baroda 234 Buy 1,10,963 2.6 2.5 76,332 -7.3 -4.8 42,151 9.4 -0.9
Canara Bank 443 Buy 92,200 7.2 3.6 73,472 5.7 -3.5 35,286 22.5 -2.1
Indian Bank 422 Buy 58,373 6.1 1.7 40,939 0.8 -4.9 19,449 39.3 -2.2
Punjab National Bank 98 Neutral 1,00,949 10.0 1.7 64,519 12.9 3.8 18,624 196.1 6.1
State Bank 642 Buy 4,01,610 5.5 1.7 1,74,095 -31.0 -10.3 1,10,183 -22.4 -23.1
Union Bank 121 Buy 94,232 9.2 3.3 71,227 7.6 -1.4 35,582 58.5 1.3
Banks-PSU 8,58,327 6.2 2.2 5,00,585 -11.9 -5.2 2,61,276 3.6 -11.3
HDFC Life Insur. 648 Neutral 1,66,563 14.3 11.5 9,464 8.2 18.2 3,504 11.2 -7.0
ICICI Lombard 1438 Buy 43,899 15.8 1.9 -1,698 Loss Loss 5,918 67.9 31.7
ICICI Pru Life 532 Buy 1,01,180 3.5 -3.0 5,138 -16.9 -11.0 2,773 25.7 13.5
Max Financial 955 Neutral 74,107 17.9 11.9 4,293 -27.6 3.2 1,487 -49.4 -5.3
SBI Life Insurance 1431 Buy 1,97,405 2.1 -2.2 14,429 -4.4 -3.2 4,017 32.1 5.7
Star Health 545 Buy 32,956 14.9 2.8 -57 PL Loss 1,947 -7.5 55.4
Insurance 6,16,110 8.8 3.2 31,568 -7.9 3.2 19,646 15.8 13.4
AAVAS Financiers 1559 Neutral 2,288 9.9 2.9 1,675 18.4 2.7 1,290 20.2 6.0
Bajaj Finance 7298 Buy 76,471 29.1 6.3 61,812 27.4 5.9 37,238 25.3 4.9
Can Fin Homes 777 Neutral 3,274 30.1 3.4 2,767 30.0 2.4 1,985 31.1 25.6
Chola. Inv & Fin. 1224 Buy 21,971 37.5 9.0 15,112 40.0 6.4 8,516 24.5 11.7
CreditAccess 1594 Buy 7,869 45.6 3.1 5,634 48.8 0.1 3,480 61.2 0.3
Fusion Micro 586 Buy 3,224 27.8 5.4 2,503 36.2 3.5 1,367 33.4 8.7
Home First Fin. 932 Buy 1,379 24.7 4.4 1,084 32.9 3.8 786 34.1 5.8
L&T Fin.Holdings 164 Buy 18,910 3.8 2.6 12,981 4.0 0.1 6,248 37.7 5.1
LIC Housing Fin 562 Buy 19,657 22.4 -6.7 17,247 27.2 -9.2 10,973 128.5 -7.6
M & M Financial 275 Buy 16,887 8.8 6.4 10,233 2.5 8.5 5,321 -15.4 126.3
Manappuram Finance 171 Buy 14,060 28.8 3.8 8,897 50.3 2.7 5,808 47.6 3.6
MAS Financial 867 Buy 1,624 31.2 6.8 1,082 32.3 4.4 639 26.4 6.4
Muthoot Finance 1468 Neutral 18,950 11.2 2.0 13,674 8.3 1.9 10,182 12.9 2.7
PNB Housing 785 Buy 6,640 -7.4 2.9 5,784 -14.2 4.8 3,995 48.4 4.3
Poonawalla Fincorp 438 Buy 5,224 73.5 10.1 3,677 136.0 9.6 2,602 73.0 13.1
Repco Home Fin 408 Neutral 1,746 25.9 3.0 1,389 26.2 3.8 1,016 25.8 3.5
Shriram Finance 2048 Buy 48,382 15.4 5.3 37,015 12.1 6.3 18,869 6.2 7.8
Spandana Sphoorty 1129 Buy 3,305 52.3 4.6 2,241 59.3 -13.0 1,331 86.4 6.3
NBFC - Lending 2,71,862 21.6 4.3 2,04,806 21.5 3.4 1,21,643 27.4 7.1
360 One WAM 705 Buy 4,521 9.0 5.9 2,349 2.8 10.3 1,886 10.0 1.3
Angel One 3584 Buy 7,019 51.8 4.0 4,199 38.9 3.1 3,149 37.8 3.7
BSE 2203 Neutral 3,809 86.7 21.1 1,625 150.7 13.8 1,390 120.9 16.7
Cams Services 2648 Buy 2,871 17.9 4.4 1,269 17.3 3.9 873 18.7 4.2
ICICI Securities 710 UR 13,034 48.1 4.4 5,846 54.9 2.7 4,397 56.4 3.8
MCX 3166 Neutral 1,766 23.0 6.9 -171 PL Loss -37 PL Loss
NBFC - Non Lending 33,019 40.6 6.3 15,118 35.7 6.0 11,657 36.1 6.2
PL: Profit to Loss; LP: Loss to Profit; For Banks: Sales = Net Interest Income, EBITDA = Operating Profits; For Life Insurance: Sales = Net
Premium, EBITDA = Operating Profits

January 2024 33
 On a roll!

Ready reckoner: Full year valuations

CMP EPS (INR) PE (x) PB (x) ROE (%)
Company Name INR Reco FY24E FY25E FY26E FY24E FY25E FY26E FY24E FY25E FY26E FY24E FY25E FY26E
Automobiles 24.2 21.5 18.8 4.8 4.0 3.5 20.0 18.8 18.5
Amara Raja Energy 825 Neutral 47.8 53.7 56.4 17.3 15.4 14.6 2.4 2.2 1.9 14.6 14.8 14.0
Apollo Tyres 453 Buy 27.9 33.0 36.6 16.2 13.7 12.4 1.6 1.4 1.3 13.0 13.8 13.6
Ashok Leyland 186 Buy 8.8 10.9 12.1 21 17 15.3 5.2 4.2 3.4 27.5 27.4 24.6
Bajaj Auto 6,701 Neutral 282.6 315.2 351.2 23.7 21.3 19.1 6.7 6.1 5.6 29.9 30.2 30.6
Balkrishna Inds 2,574 Neutral 71.7 94.9 118.1 35.9 27.1 21.8 5.9 5.2 4.5 17.4 20.5 22.1
Bharat Forge 1,247 Buy 27.7 40.2 44.6 45.0 31.0 27.9 7.5 6.3 5.2 17.9 22.0 20.4
Bosch 22,417 Neutral 557.7 715.6 815.4 40.2 31.3 27.5 5.3 4.9 4.4 14.1 16.3 17.0
CEAT 2,431 Buy 173.9 181.9 202.6 14.0 13.4 12.0 2.4 2.1 1.8 18.7 16.7 16.0
CIE Automotive 496 Buy 22.3 26.5 30.7 22.3 18.7 16.1 3.2 2.9 2.5 15.5 16.3 16.5
Craftsman Auto 5,330 Buy 186.8 232.4 289.2 28.5 22.9 18.4 6.5 5.1 4.1 25.3 24.9 24.7
Eicher Motors 4,035 Neutral 147.5 167.2 195.2 27.4 24.1 20.7 6.2 5.3 4.4 24.6 23.6 23.2
Endurance Tech. 1,915 Buy 48.5 61.9 72.0 39.5 31.0 26.6 5.4 4.7 4.1 14.5 16.3 16.4
Escorts Kubota 2,967 Neutral 90.3 104.4 119.9 32.9 28.4 24.7 4.0 3.5 3.1 12.7 13.1 13.3
Exide Inds. 322 Buy 12.9 15.8 18.4 24.9 20.3 17.5 2.3 2.1 1.9 9.1 10.3 10.9
Hero Motocorp 4,116 Buy 199.7 215.7 242.4 20.6 19.1 17.0 4.4 4.0 3.5 22.7 22.0 22.0
Mahindra & Mahindra 1,704 Buy 89.4 94.4 104.7 19.1 18.1 16.3 3.9 3.4 2.9 22.5 20.2 19.3
Maruti Suzuki 10,282 Buy 443.3 460.9 508.2 23.2 22.3 20.2 4.4 3.4 3.0 18.7 15.1 14.8
Motherson Wiring 62 Buy 1.4 1.8 2.1 44.2 34.6 30.0 16.5 13.2 10.9 41.5 42.3 39.7
MRF 129,439 Sell 5,385.8 5,360.8 5,929.5 24.0 24.1 21.8 3.2 2.9 2.5 14.4 12.6 12.4
Samvardhana Moth. 106 Buy 4.3 5.1 5.7 24.7 20.6 18.5 2.9 2.7 2.4 12.4 13.5 13.6
Sona BLW Precis. 645 Neutral 8.9 11.6 13.8 72.2 55.8 46.7 14.2 12.1 10.3 21.1 23.4 23.8
Tata Motors 791 Buy 43.2 49.5 61.1 18.3 16.0 12.9 5.0 3.8 3.0 31.4 26.6 25.7
Tube Investments 3,576 Buy 59.2 73.2 83.6 60.4 48.8 42.7 14.0 11.3 9.2 25.8 25.6 23.7
TVS Motor 2,019 Neutral 43.9 53.5 62.5 46.0 37.7 32.3 12.2 9.5 7.5 30.0 28.4 26.0
Capital Goods 43.4 35.1 29.0 6.9 6.0 5.3 15.8 17.2 18.1
ABB India 4,679 Buy 56.7 68.8 81.8 82.5 68.0 57.2 16.4 13.5 11.1 21.9 21.7 21.3
Bharat Electronics 185 Neutral 4.7 5.3 6.0 39.3 35.1 30.7 8.6 7.5 6.6 22.0 21.5 21.5
Cummins India 1,955 Buy 45.5 54.4 64.1 43.0 35.9 30.5 9.2 8.3 7.5 22.4 24.4 25.9
Hitachi Energy 5,460 Sell 28.4 74.5 109.4 192.4 73.3 49.9 17.3 14.0 10.9 9.0 19.1 21.9
Kalpataru Proj. 716 Buy 36.3 55.8 65.8 19.7 12.8 10.9 2.0 1.7 1.5 10.6 14.4 14.8
KEC International 606 Neutral 16.9 30.0 43.6 35.9 20.2 13.9 3.7 3.2 2.7 10.9 17.1 21.0
Kirloskar Oil 663 Buy 23.9 29.9 36.9 27.7 22.2 17.9 3.7 3.3 2.9 14.1 15.8 17.3
Larsen & Toubro 3,522 Buy 97.6 120.9 146.9 36.1 29.1 24.0 5.4 4.8 4.2 15.0 17.5 18.7
Siemens 4,025 Buy 55.1 65.0 77.5 73.1 62.0 51.9 11.0 9.7 8.5 15.9 16.6 17.5
Thermax 3,087 Neutral 50.6 61.0 72.1 61.0 50.6 42.8 8.2 7.3 6.4 14.0 15.2 15.9
Triveni Turbine 420 Buy 7.9 10.6 14.0 53.1 39.5 30.0 14.2 11.3 8.9 29.6 31.8 33.1
Cement 36.3 30.9 26.2 3.7 3.2 3.0 10.2 10.5 11.4
ACC 2,244 Neutral 89.3 110.6 118.5 25.1 20.3 18.9 2.7 2.4 2.2 11.3 12.6 12.1
Ambuja Cements 535 Neutral 13.3 11.8 13.5 40.1 45.5 39.5 3.5 2.8 2.7 14.9 10.7 9.1
Birla Corporation 1,498 Buy 49.1 72.9 88.5 30.5 20.5 16.9 1.8 1.7 1.6 6.2 8.6 9.7
Dalmia Bharat 2,361 Buy 43.5 64.3 89.1 54.2 36.7 26.5 2.7 2.6 2.4 5.1 7.2 9.3
Grasim Industries 2,126 Buy 94.7 97.3 106.2 22.5 21.9 20.0 2.8 2.7 2.6 4.3 2.9 3.8
India Cements 261 Sell -5.6 6.4 7.8 -46.9 41.0 33.4 1.5 1.4 1.4 -3.1 3.6 4.2
J K Cements 3,821 Buy 101.5 116.1 150.1 37.6 32.9 25.5 5.6 4.9 4.2 15.7 15.8 17.9
JK Lakshmi Cem. 899 Buy 37.1 46.7 53.8 24.2 19.2 16.7 3.3 2.9 2.5 14.6 16.1 16.1
Ramco Cements 1,014 Neutral 19.3 30.4 38.2 52.5 33.4 26.5 3.3 3.1 2.8 6.5 9.6 11.0
Shree Cement 28,462 Neutral 584.7 581.6 713.9 48.7 48.9 39.9 5.1 4.7 4.3 11.0 10.1 11.3
Ultratech Cement 10,461 Buy 250.3 310.1 375.5 41.8 33.7 27.9 5.0 4.4 3.9 12.6 14.0 14.9
Chemicals-Specialty 51.3 40.1 33.3 6.7 5.9 5.1 13.0 14.6 15.3
Alkyl Amines 2,701 Neutral 28.9 50.0 66.3 93.4 54.0 40.7 10.8 9.3 7.9 12.1 18.5 21.0
Atul 7,145 Neutral 106.2 154.1 182.8 67.3 46.4 39.1 4.3 3.9 3.6 6.5 8.8 9.7
Clean Science 1,591 Neutral 21.8 27.1 33.3 73.0 58.6 47.8 14.1 11.8 9.8 20.9 21.9 22.4
Deepak Nitrite 2,475 Neutral 64.6 78.6 92.7 38.3 31.5 26.7 6.9 5.8 4.9 19.7 20.1 19.9
Fine Organic 4,961 Sell 108.3 102.5 100.3 45.8 48.4 49.5 8.3 7.1 6.3 19.8 15.8 13.5
Galaxy Surfactants 2,775 Buy 95.3 111.5 129.9 29.1 24.9 21.4 4.6 4.0 3.5 16.7 17.1 17.4
Navin Fluorine 3,857 Neutral 56.1 83.4 106.3 68.8 46.2 36.3 7.9 6.9 6.0 12.1 15.9 17.6
NOCIL 274 Neutral 8.1 10.3 13.3 33.6 26.7 20.6 2.8 2.6 2.4 8.6 10.1 12.2
Vinati Organics 1,755 Buy 30.5 42.3 54.7 57.6 41.5 32.1 7.3 6.3 5.4 13.3 16.3 18.2
Consumer 50.2 44.6 40.0 13.1 12.4 11.6 26.1 27.8 29.2

January 2024 34
 On a roll!

Ready reckoner: Full year valuations

CMP EPS (INR) PE (x) PB (x) ROE (%)
Company Name INR Reco FY24E FY25E FY26E FY24E FY25E FY26E FY24E FY25E FY26E FY24E FY25E FY26E
Asian Paints 3,395 Neutral 56.0 62.2 70.8 60.6 54.6 48.0 19.0 17.0 14.8 32.4 32.9 33.0
Britannia 5,316 Neutral 88.5 98.2 111.2 60.1 54.2 47.8 35.8 32.6 29.6 60.0 63.0 64.9
Colgate 2,482 Neutral 45.9 48.7 51.2 54.0 51.0 48.5 39.3 39.3 39.3 72.8 77.2 81.1
Dabur 558 Buy 11.3 12.8 14.6 49.4 43.7 38.2 9.8 9.0 8.2 21.0 21.5 22.5
Emami 573 Buy 19.5 21.6 24.6 29.4 26.5 23.3 10.5 9.4 8.2 36.3 37.3 37.7
Godrej Consumer 1,145 Buy 18.6 22.9 26.4 61.6 50.0 43.4 8.0 7.6 7.2 13.4 15.7 17.1
Hind. Unilever 2,656 Buy 46.0 51.4 56.2 57.7 51.7 47.3 12.9 13.6 14.3 21.9 25.7 29.5
Indigo Paints 1,492 Buy 30.4 40.7 49.0 49.1 36.6 30.5 8.0 6.8 5.8 17.3 20.0 20.6
ITC 467 Buy 16.3 18.4 20.0 28.7 25.5 23.3 8.2 7.8 7.4 29.2 31.3 32.4
Jyothy Labs 483 Neutral 10.0 11.4 12.8 48.4 42.3 37.9 10.2 9.3 8.3 22.4 23.0 23.1
Marico 542 Buy 11.4 12.6 13.9 47.7 43.2 39.1 16.3 15.3 14.5 36.2 36.6 38.0
Nestle 2,737 Neutral 29.8 36.0 40.3 91.7 76.0 67.8 90.2 75.3 65.7 142.6 108.0 103.4
P&G Hygiene 17,373Neutral 251.9 293.7 339.2 69.0 59.2 51.2 54.9 46.3 39.2 82.9 85.0 82.9
Page Industries 38,771Neutral 549.0 625.9 739.8 70.6 61.9 52.4 26.7 22.8 19.4 37.9 36.8 37.0
Pidilite Inds. 2,697 Neutral 36.5 43.4 49.5 74.0 62.2 54.4 16.6 14.5 12.7 24.0 24.9 24.9
Tata Consumer 1,080 Buy 14.4 19.3 21.5 75.2 56.0 50.2 5.8 5.3 4.9 8.1 9.7 10.1
United Breweries 1,792 Sell 19.2 26.7 34.9 93 67 51.3 11.2 10.3 9.3 12.4 15.9 19.0
United Spirits 1,106 Neutral 14.8 17.7 20.5 75 62 53.9 11.9 12.2 12.1 15.9 19.5 22.5
Varun Beverages 1,242 Buy 15.9 19.8 24.4 78.3 62.7 50.9 23.3 17.4 13.3 34.2 31.8 29.6
EMS 77.0 49.9 34.1 8.1 7.0 5.8 10.6 14.0 17.1
Avalon Tech 544 Buy 8.6 15.2 21.5 63.3 35.9 25.4 6.0 5.1 4.3 9.9 15.4 18.3
Cyient DLM 675 Buy 7.9 14.3 23.5 85.5 47.1 28.8 5.6 5.0 4.2 10.8 11.2 16.0
Data Pattern 1,840 Neutral 31.5 43.2 60.4 58.4 42.6 30.5 7.7 6.5 5.4 14.1 16.6 19.4
Kaynes Tech 2,669 Buy 28.2 44.9 62.5 94.6 59.4 42.7 13.8 11.2 8.9 15.8 20.8 23.2
Syrma SGS Tech. 660 Buy 8.1 12.0 18.8 81.2 54.8 35.0 6.9 6.2 5.2 8.9 11.9 16.1
Financials
Banks-Private 18.3 15.2 12.7 2.8 2.4 2.1 15.2 15.8 16.4
AU Small Finance 786 Buy 25.2 33.4 46.1 31.1 23.5 17.1 4.3 3.6 3.0 14.5 16.6 19.1
Axis Bank 1,098 Buy 76.7 93.9 114.6 14.3 11.7 9.6 2.2 1.9 1.6 17.0 17.5 18.1
Bandhan Bank 244 Neutral 20.4 25.7 30.9 11.9 9.5 7.9 1.8 1.6 1.4 15.9 17.7 18.5
DCB Bank 145 Neutral 17.3 21.1 25.2 8.4 6.9 5.8 0.9 0.8 0.7 11.9 13.1 13.8
Equitas Small Fin. 107 Buy 7.3 8.7 11.4 14.6 12.3 9.4 2.0 1.8 1.5 14.8 15.5 17.6
Federal Bank 157 Buy 16.8 19.2 22.9 9.3 8.2 6.8 1.3 1.2 1.0 15.2 15.1 15.8
HDFC Bank 1,701 Buy 82.0 98.8 118.9 20.7 17.2 14.3 2.9 2.6 2.3 14.9 16.0 16.9
ICICI Bank 1,001 Buy 57.3 65.4 76.3 17.5 15.3 13.1 3.0 2.6 2.2 18.7 18.2 18.1
IDFC First Bank 88 Neutral 4.7 6.0 7.8 18.5 14.7 11.3 1.8 1.6 1.4 10.9 11.7 13.3
IndusInd Bank 1,600 Buy 117.4 145.5 178.6 13.6 11.0 9.0 2.0 1.7 1.5 15.5 16.7 17.6
Kotak Mahindra Bank 1,911 Neutral 92.0 105.4 124.0 20.8 18.1 15.4 2.9 2.5 2.2 15.1 14.7 14.7
RBL Bank 285 Neutral 21.1 28.3 37.4 13.5 10.1 7.6 1.2 1.1 1.0 9.0 11.2 13.6
SBI Cards 766 Buy 25.7 35.1 47.0 29.8 21.8 16.3 6.0 4.8 3.8 22.3 24.5 25.9
Banks-PSU 8.3 6.5 5.4 1.2 1.1 0.9 14.8 16.4 17.0
Bank of Baroda 234 Buy 32.8 39.3 47.1 7.1 5.9 5.0 1.1 1.0 0.8 17.1 17.7 18.2
Canara Bank 443 Buy 79.1 95.4 114.2 5.6 4.6 3.9 1.0 0.8 0.7 19.7 19.7 19.6
Indian Bank 422 Buy 59.8 71.6 86.9 7.1 5.9 4.9 1.0 0.9 0.8 16.4 17.0 17.7
Punjab National Bank 98 Neutral 6.4 10.1 14.6 15.3 9.7 6.7 1.0 1.0 0.8 7.4 10.6 13.8
State Bank 642 Buy 70.7 90.5 106.3 9.1 7.1 6.0 1.4 1.2 1.0 17.3 18.9 18.5
Union Bank 121 Buy 19.6 22.7 26.9 6.2 5.3 4.5 1.0 0.9 0.7 17.4 17.7 18.2
Insurance 28.3 28.1 21.4 7.6 6.1 4.8 27.0 21.8 22.7
HDFC Life Insur. 648 Neutral 8.2 8.8 9.7 79.3 73.4 66.6 3.0 2.5 2.1 18.5 18.1 17.8
ICICI Lombard 1,438 Buy 41.5 50.9 58.1 34.6 28.2 24.8 6.0 5.2 4.6 18.4 19.8 19.7
ICICI Pru Life 532 Buy 7.4 9.5 11.4 71.4 55.7 46.6 1.8 1.6 1.3 17.1 17.1 17.2
Life Insurance Corp. 858 Buy 44.9 42.6 58.4 19.1 20.2 14.7 0.8 0.7 0.6 19.8 12.6 12.4
Max Financial 955 Neutral 13.3 16.3 22.5 72.0 58.6 42.5 2.1 1.8 1.5 20.2 19.6 19.1
SBI Life Insurance 1,431 Buy 20.3 23.8 26.1 70.6 60.1 54.8 2.6 2.1 1.8 21.2 20.4 20.2
Star Health 545 Buy 14.3 19.6 24.5 38.2 27.9 22.2 4.3 3.7 3.2 11.9 14.3 15.4
NBFC - Lending 19.2 15.6 12.6 2.8 2.4 2.1 14.4 15.4 16.3
AAVAS Financiers 1,559 Neutral 62.7 76.4 95.9 24.9 20.4 16.3 3.3 2.8 2.4 14.1 14.8 16.0
Aditya Birla Cap 166 Buy 10.8 13.9 17.5 15.3 11.9 9.5 1.7 1.5 1.3 12.3 13.5 14.9
Bajaj Finance 7,298 Buy 238.0 306.3 389.4 30.7 23.8 18.7 5.9 4.8 4.0 22.5 22.4 23.2
Can Fin Homes 777 Neutral 56.3 62.3 73.9 13.8 12.5 10.5 2.4 2.0 1.7 18.8 17.6 17.7

January 2024 35
 On a roll!

Ready reckoner: Full year valuations

CMP EPS (INR) PE (x) PB (x) ROE (%)
Company Name INR Reco FY24E FY25E FY26E FY24E FY25E FY26E FY24E FY25E FY26E FY24E FY25E FY26E
Chola. Inv & Fin. 1,224 Buy 41.5 55.4 68.8 29.5 22.1 17.8 5.3 4.3 3.3 20.6 21.4 21.2
CreditAccess 1,594 Buy 92.7 113.3 135.6 17.2 14.1 11.8 3.9 3.0 2.4 25.2 24.1 22.8
Fusion Micro 586 Buy 54.0 72.1 88.7 10.8 8.1 6.6 2.1 1.6 1.3 20.9 22.4 22.1
Home First Fin. 932 Buy 34.3 41.6 53.5 27.2 22.4 17.4 3.9 3.4 2.9 15.5 16.3 17.9
Indostar Capital 173 Buy 8.4 17.6 29.1 20.4 9.8 5.9 0.7 0.7 0.6 3.6 7.1 10.8
L&T Fin.Holdings 164 Buy 9.7 11.7 15.5 16.8 14.0 10.6 1.7 1.6 1.5 10.7 11.9 14.6
LIC Housing Fin 562 Buy 82.2 84.1 92.2 6.8 6.7 6.1 1.0 0.9 0.8 15.7 14.3 14.0
M & M Financial 275 Buy 14.6 22.2 27.8 18.8 12.4 9.9 1.9 1.8 1.6 10.6 14.9 16.8
Manappuram Finance 171 Buy 26.5 30.1 35.9 6.5 5.7 4.8 1.3 1.1 0.9 21.1 20.1 20.1
MAS Financial 867 Buy 45.6 58.2 71.3 19.0 14.9 12.2 2.8 2.4 2.0 15.8 17.3 18.0
Muthoot Finance 1,468 Neutral 101.0 115.0 130.9 14.5 12.8 11.2 2.4 2.1 1.8 17.9 17.7 17.5
Piramal Enterprises 933 Buy 56.8 78.0 106.3 16.4 12.0 8.8 0.7 0.7 0.6 4.2 5.8 7.5
PNB Housing 785 Buy 58.8 70.7 86.5 13.3 11.1 9.1 1.4 1.2 1.1 11.7 11.6 12.8
Poonawalla Fincorp 438 Buy 12.9 18.8 26.2 33.9 23.3 16.7 4.1 3.5 3.0 13.5 16.2 19.5
Repco Home Fin 408 Neutral 61.2 64.8 71.4 6.7 6.3 5.7 0.9 0.8 0.7 14.2 13.2 12.8
Shriram Finance 2,048 Buy 195.8 222.8 268.5 10.5 9.2 7.6 1.6 1.4 1.2 15.8 15.9 16.7
Spandana Sphoorty 1,129 Buy 73.5 92.6 110.9 15.3 12.2 10.2 2.2 1.9 1.6 15.5 16.6 16.9
NBFC - Non Lending 28.2 23.3 19.8 9.3 8.1 7.1 33.1 34.9 35.6
Angel One 3,584 Buy 141.2 172.7 205.7 25.4 20.8 17.4 10.3 7.9 6.2 46.4 43.2 40.0
BSE 2,203 Neutral 64.2 60.6 73.3 34.3 36.4 30.1 11.2 10.2 9.3 32.6 28.1 30.9
Cams Services 2,648 Buy 68.8 84.9 103.4 38.5 31.2 25.6 14.4 12.4 10.6 40.1 42.7 44.7
ICICI Securities 710 UR 50.0 57.2 65.3 14.2 12.4 10.9 6.7 5.6 4.8 51.5 49.4 47.5
360 ONE WAM 705 Buy 21.2 26.6 31.1 33.2 26.5 22.7 7.7 7.3 6.8 23.8 28.3 31.1
MCX 3,166 Neutral 19.1 76.7 90.2 165.8 41.3 35.1 10.8 10.2 9.7 6.5 25.4 28.4
Healthcare 33.4 28.0 24.1 4.4 3.9 3.5 13.3 14.0 14.3
Ajanta Pharma 2,154 Buy 61.1 74.4 89.5 35.2 28.9 24.1 6.9 5.9 5.0 21.1 21.9 22.3
Alembic Pharma 765 Neutral 28.6 33.8 38.0 26.7 22.6 20.1 3.1 2.8 2.5 12.1 12.9 13.0
Alkem Lab 5,123 Neutral 149.2 173.0 183.7 34.3 29.6 27.9 5.9 5.1 4.5 18.4 18.5 17.1
Apollo Hospitals 5,748 Buy 63.7 92.5 132.2 90.3 62.1 43.5 11.4 9.7 7.9 13.8 17.4 20.7
Aurobindo Pharma 1,080 Neutral 51.2 58.7 67.5 21.1 18.4 16.0 2.1 1.9 1.7 10.6 11.0 11.4
Biocon 256 Neutral 7.2 13.1 16.9 35.6 19.5 15.2 1.7 1.6 1.5 4.7 8.3 10.0
Cipla 1,251 Buy 47.4 53.4 57.5 26.4 23.4 21.8 3.9 3.4 3.0 14.6 14.3 13.6
Divis Labs 3,913 Neutral 60.9 81.1 97.4 64.2 48.2 40.2 7.5 6.8 6.1 12.1 14.7 15.9
Dr Reddy’ s Labs 5,819 Neutral 296.7 308.8 324.9 19.6 18.8 17.9 3.5 3.0 2.6 19.5 17.2 15.5
Eris Lifescience 905 Neutral 33.0 33.5 40.7 27.5 27.0 22.2 4.9 4.3 3.6 19.1 17.0 17.6
Gland Pharma 1,907 Buy 54.4 65.7 74.5 35.1 29.0 25.6 3.5 3.2 2.8 10.6 11.5 11.6
Glenmark Pharma 856 Neutral 24.1 39.3 48.0 35.5 21.8 17.8 2.3 2.1 1.9 6.8 10.1 11.2
Global Health 951 Buy 18.0 21.7 25.6 52.8 43.8 37.1 9.0 7.7 6.6 18.4 19.0 19.2
Granules India 412 Buy 19.4 27.1 34.9 21.2 15.2 11.8 3.0 2.5 2.1 15.3 18.1 19.4
GSK Pharma 1,953 Neutral 38.1 42.1 46.4 51.2 46.4 42.1 15.8 14.1 12.4 30.8 30.4 29.5
IPCA Labs. 1,119 Neutral 24.5 36.9 49.0 45.7 30.3 22.9 4.5 4.0 3.5 10.2 13.9 16.2
Laurus Labs 433 Buy 9.1 16.9 19.0 47.4 25.7 22.8 5.2 4.5 3.8 11.6 18.7 18.1
Lupin 1,313 Sell 36.0 40.7 48.3 36.5 32.3 27.2 4.2 3.8 3.3 12.3 12.3 13.0
Max Healthcare 688 Buy 14.4 17.5 21.3 47.8 39.4 32.2 7.1 6.0 5.1 15.9 16.5 17.0
Piramal Pharma 139 Buy 1.4 3.0 4.6 97.5 46.0 29.8 2.1 2.0 1.8 2.5 4.9 7.1
Sun Pharma 1,260 Buy 39.5 45.6 53.7 31.9 27.6 23.5 4.8 4.1 3.6 15.9 16.0 16.4
Torrent Pharma 2,296 Neutral 50.1 66.3 79.5 45.8 34.6 28.9 9.3 4.7 4.7 23.3 26.9 32.3
Zydus Lifesciences 698 Neutral 32.6 33.7 36.1 21.4 20.7 19.3 3.4 3.0 2.7 17.3 15.4 14.6
Infrastructure 23.0 18.9 16.5 1.9 1.7 1.6 8.2 9.2 9.6
G R Infraproject 1,132 Buy 74.8 85.4 98.6 15.1 13.3 11.5 1.8 1.6 1.4 13.0 13.0 13.2
IRB Infra 42 Neutral 1.2 1.6 1.8 35.1 26.5 22.8 1.8 1.7 1.6 5.3 6.7 7.4
KNR Constructions 258 Buy 15.8 18.4 20.4 16.3 14.0 12.6 2.3 2.0 1.7 15.1 15.1 14.6
Logistics 29.0 24.5 20.2 4.5 4.0 3.5 15.6 16.3 17.3
Adani Ports 1,048 Buy 40.2 46.5 56.5 26.1 22.6 18.6 4.3 3.8 3.3 17.7 17.9 19.0
Blue Dart Express 7,332 Buy 134.1 199.5 251.7 54.7 36.8 29.1 12.1 9.8 7.8 23.6 29.6 29.9
Concor 861 Buy 21.7 25.5 29.5 39.6 33.8 29.2 4.4 4.1 3.8 11.4 12.6 13.6
Mahindra Logistics 392 Neutral -3.0 9.1 19.2 -129.8 43.2 20.4 5.4 4.9 4.1 -4.0 11.9 21.9
TCI Express 1,379 Buy 39.1 46.3 53.5 35.2 29.8 25.8 7.4 6.1 5.1 22.9 22.5 21.6
Transport Corp. 831 Buy 46.6 56.0 65.9 17.9 14.8 12.6 3.2 2.6 2.2 18.9 19.1 18.8
VRL Logistics 763 Buy 14.6 24.5 32.8 52.1 31.1 23.2 6.4 5.7 4.9 12.7 19.4 22.8

January 2024 36
 On a roll!

Ready reckoner: Full year valuations

CMP EPS (INR) PE (x) PB (x) ROE (%)
Company Name INR Reco FY24E FY25E FY26E FY24E FY25E FY26E FY24E FY25E FY26E FY24E FY25E FY26E
Media 28.1 22.2 18.2 2.5 2.4 2.2 9.0 10.8 12.2
PVR Inox 1,660 Neutral 24.1 56.8 85.1 68.9 29.2 19.5 2.1 2.0 1.8 3.2 7.1 9.8
Sun TV 710 Buy 46.2 49.2 51.8 15.4 14.4 13.7 2.8 2.6 2.4 18.4 18.3 17.8
Zee Entertainment 285 Buy 5.1 7.7 11.1 55.8 37.1 25.6 2.6 2.5 2.3 4.6 6.7 9.3
Metals 15.9 11.8 10.3 2.3 2.1 1.8 14.4 17.4 17.9
Coal India 382 Buy 41.1 41.1 45.9 9.3 9.3 8.3 3.4 2.9 2.5 36.3 30.9 29.5
Hindalco 609 Buy 47.3 56.7 64.1 12.9 10.8 9.5 1.7 1.5 1.3 14.2 14.9 14.7
Hindustan Zinc 318 Neutral 18.0 23.1 25.0 17.7 13.8 12.8 9.5 7.1 5.5 56.0 59.1 48.8
JSPL 743 Buy 48.1 56.6 80.4 15.4 13.1 9.2 1.7 1.6 1.3 11.8 12.5 15.6
JSW Steel 877 Neutral 42.3 65.3 73.7 20.7 13.4 11.9 2.9 2.5 2.1 14.7 19.8 19.1
Nalco 136 Neutral 5.8 8.8 10.9 23.6 15.5 12.5 1.8 1.7 1.6 7.9 11.4 13.2
NMDC 212 Buy 18.6 21.5 24.5 11.3 9.8 8.6 2.4 2.1 1.9 22.6 23.0 23.1
SAIL 125 Neutral 2.6 7.9 10.5 48.8 15.8 11.9 0.9 0.9 0.8 1.9 5.7 7.3
Tata Steel 140 Neutral 4.5 10.9 12.6 31.1 12.8 11.1 1.9 1.8 1.6 5.9 14.2 15.3
Vedanta 257 Neutral 10.3 20.1 22.7 25.0 12.8 11.4 3.7 3.9 3.8 11.7 29.6 33.8
Oil & Gas 11.5 12.5 11.3 1.6 1.5 1.4 14.3 12.0 12.1
Aegis Logistics 349 Neutral 14.5 15.7 16.6 24.2 22.3 21.1 3.2 2.9 2.7 13.7 13.6 13.2
BPCL 452 Neutral 128.1 76.4 76.6 3.5 5.9 5.9 1.4 1.2 1.1 44.3 22.2 19.9
Castrol India 191 Buy 8.5 8.6 10.0 22.6 22.2 19.2 9.2 8.4 7.7 42.5 39.6 42.1
GAIL 166 Buy 12.7 12.7 16.3 13.1 13.1 10.2 1.6 1.5 1.4 14.2 13.0 15.0
Gujarat Gas 484 Buy 15.8 18.7 21.2 30.6 25.9 22.9 4.3 3.8 3.4 14.7 15.7 15.9
Gujarat State Petronet 320 Buy 22.8 19.0 19.7 14.1 16.9 16.2 1.8 1.7 1.5 13.2 10.1 9.8
HPCL 400 Neutral 111.6 80.8 78.7 3.6 4.9 5.1 1.3 1.1 0.9 41.7 24.0 19.9
Indraprastha Gas 421 Sell 27.1 25.9 25.9 15.5 16.3 16.2 3.5 3.0 2.7 24.4 20.0 17.6
IOC 130 Buy 28.6 16.3 15.6 4.6 8.0 8.4 1.1 1.0 0.9 26.1 13.3 11.8
Mahanagar Gas 1,204 Buy 133.7 109.6 114.9 9.0 11.0 10.5 2.4 2.1 1.9 29.2 20.6 19.2
MRPL 133 Neutral 19.8 15.2 14.0 6.7 8.7 9.5 1.9 1.6 1.4 31.0 19.7 15.8
Oil India 378 Buy 59.4 61.6 68.0 6.4 6.1 5.6 1.1 1.0 0.9 19.8 16.4 16.4
ONGC 205 Buy 42.7 45.0 50.9 4.8 4.6 4.0 0.8 0.8 0.7 18.4 17.4 17.7
Petronet LNG 226 Neutral 23.0 20.2 21.6 9.8 11.2 10.5 2.0 1.8 1.7 21.7 17.2 16.8
Reliance Inds. 2,590 Buy 102.4 120.9 138.5 25.3 21.4 18.7 1.9 1.7 1.6 8.1 8.9 9.3
Real Estate 52.1 36.7 33.5 4.8 4.3 3.8 9.2 11.7 11.4
Brigade Enterpr. 896 Buy 17.3 35.7 40.2 51.9 25.1 22.3 5.1 4.3 3.6 10.4 18.7 17.7
DLF 724 Neutral 14.5 21.5 17.2 50.1 33.7 42.0 3.2 2.9 2.7 9.1 12.4 9.1
Godrej Properties 2,001 Buy 26.7 43.0 48.5 74.9 46.5 41.2 5.6 5.0 4.5 7.7 11.4 11.5
Macrotech Developers 1,050 Buy 15.1 24.9 27.9 69.3 42.2 37.7 7.3 6.4 5.7 11.0 16.2 16.0
Mahindra Lifespace 545 Buy 0.5 7.5 6.0 1,058.0 73.0 90.8 4.6 4.4 4.2 0.4 6.2 4.7
Oberoi Realty 1,448 Neutral 42.2 49.2 66.9 34.3 29.4 21.6 3.9 3.4 3.0 11.8 12.3 14.7
Phoenix Mills 2,253 Neutral 57.7 71.7 100.8 39.0 31.4 22.3 4.3 3.8 3.3 11.6 12.8 15.7
Prestige Estates 1,185 Buy 27.6 19.7 25.5 43.0 60.1 46.5 4.1 3.8 3.5 9.9 6.5 7.9
Sobha 1,023 Buy 16.1 40.8 83.6 63.7 25.1 12.2 3.8 3.3 2.6 6.1 14.1 23.9
Sunteck Realty 448 Buy 8.2 15.7 22.9 54.9 28.5 19.6 2.3 2.1 1.9 4.2 7.7 10.3
Retail 97.3 71.1 54.7 15.5 13.3 11.1 15.9 18.6 20.3
Aditya Birla Fashion 226 Neutral -6.3 -5.6 -7.1 -36.0 -40.4 -31.9 5.5 6.3 7.9 -16.9 -14.6 -22.1
Avenue Supermarts 4,066 Buy 40.9 56.3 74.8 99.3 72.3 54.4 14.1 11.8 9.7 15.3 17.7 NA
Barbeque Nation 667 Neutral -6.8 3.2 5.1 -97.9 205.9 130.3 6.9 6.7 6.4 -7.1 3.3 4.9
Bata India 1,638 Neutral 27.7 35.3 47.0 59.2 46.4 34.8 11.9 9.5 7.5 22.2 22.8 24.0
Campus Activewear 285 Buy 4.1 4.3 6.6 69.0 66.5 42.9 12.9 10.8 8.6 18.6 16.2 20.1
Devyani Intl. 192 Buy 1.2 2.1 2.7 157.9 91.9 70.0 21.5 17.4 13.9 14.3 20.9 22.1
Jubilant Foodworks 562 Buy 5.6 7.5 9.1 99.6 74.4 61.7 15.4 16.8 3.3 15.4 22.5 27.1
Metro Brands 1,246 Buy 13.3 18.5 22.8 93.3 67.3 54.6 18.6 15.8 13.3 21.8 26.0 27.1
Raymond 1,738 Buy 111.0 127.0 160.3 15.7 13.7 10.8 2.5 2.1 1.8 19.7 16.8 17.9
Relaxo Footwear 901 Neutral 8.6 13.7 19.7 104.9 65.6 45.8 11.1 9.9 8.5 11.0 16.0 19.9
Restaurant Brands 115 Buy -2.5 -0.9 2.1 -46.0 -128.6 54.2 7.9 8.4 7.3 -15.8 -6.3 14.4
Sapphire Foods 1,409 Buy 15.9 27.1 40.7 88.8 52.0 34.7 6.6 5.9 5.0 7.7 11.9 15.6
Shoppers Stop 684 Neutral 11.8 20.9 21.6 58.1 32.7 31.6 17.5 11.4 8.4 35.3 42.3 30.6
Titan Company 3,675 Buy 44.9 54.9 67.8 81.9 66.9 54.2 22.4 18.5 15.3 30.1 30.4 31.0
Trent 3,000 Buy 25.3 35.1 46.0 119 85 65.2 28.5 21.0 15.6 29.5 30.3 29.4
V-Mart Retail 2,022 Neutral -58.7 18.2 55.9 -34 111 36.2 4.9 4.7 4.2 NM 4.3 12.3
Vedant Fashions 1,277 Neutral 18.2 22.4 27.2 70 57 46.9 19.2 16.1 13.4 28.8 29.7 27.7

January 2024 37
 On a roll!

Ready reckoner: Full year valuations

CMP EPS (INR) PE (x) PB (x) ROE (%)
Company Name INR Reco FY24E FY25E FY26E FY24E FY25E FY26E FY24E FY25E FY26E FY24E FY25E FY26E
Westlife Foodworld 819 Neutral 7.6 11.9 16.9 107.3 68.8 48.4 18.6 14.7 11.2 19.0 23.9 26.3
Staffing 23.8 15.7 13.3 3.2 2.7 2.3 13.4 17.4 17.5
Quess Corp 519 Neutral 22.3 37.2 40.8 23.2 13.9 12.7 2.2 2.0 1.7 12.8 19.7 19.2
SIS 465 Buy 25.5 35.5 45.4 18.2 13.1 10.2 1.2 1.0 0.8 15.0 17.9 18.8
Team Lease Serv. 3,254 Buy 77.7 112.4 135.3 41.9 28.9 24.1 5.8 4.9 4.1 14.8 18.2 18.3
Technology 30.1 26.2 22.3 8.8 8.8 8.6 29.4 33.5 38.6
Coforge 6,190 Neutral 147.2 185.7 217.4 42.1 33.3 28.5 10.5 8.8 7.4 26.8 28.8 28.5
Cyient 2,298 Buy 70.5 87.4 102.9 32.6 26.3 22.3 6.7 6.1 5.5 21.6 24.4 26.0
HCL Technologies 1,483 Buy 57.2 65.0 72.8 25.9 22.8 20.4 6.2 6.3 6.4 23.9 27.5 31.2
Infosys 1,551 Buy 59.7 68.0 79.6 26.0 22.8 19.5 8.5 8.5 8.4 32.7 37.2 43.4
LTIMindtree 6,266 Neutral 160.1 195.5 242.0 39.1 32.1 25.9 9.5 8.1 6.8 26.3 27.3 28.6
L&T Technology 5,207 Buy 123.9 151.2 206.4 42.0 34.4 25.2 10.5 9.1 7.6 25.7 28.3 32.9
MphasiS 2,732 Neutral 82.6 97.6 117.2 33.1 28.0 23.3 6.0 5.5 5.1 19.0 20.8 22.9
Persistent Systems 7,322 Neutral 143.6 178.3 215.8 51.0 41.1 33.9 11.9 10.0 8.3 25.7 27.0 27.4
TCS 3,811 Buy 126.0 143.7 167.6 30.3 26.5 22.7 15.8 16.4 17.0 51.7 60.7 73.4
Tech Mahindra 1,298 Neutral 41.8 51.1 67.8 31.1 25.4 19.1 4.0 3.9 3.8 13.1 15.7 20.2
Wipro 477 Neutral 19.6 22.8 27.3 24.3 20.9 17.5 3.4 3.4 3.3 13.8 16.2 19.2
Zensar Tech 608 Neutral 25.5 23.9 27.8 23.8 25.4 21.9 4.2 3.8 3.5 18.6 15.9 16.9
Telecom -61 9,950 99.3 24.9 25.1 20.2 -40.8 0.3 20.4
Bharti Airtel 1,013 Buy 20.4 30.5 36.9 49.7 33.2 27.4 5.3 4.6 3.9 12.4 14.8 15.4
Indus Towers 203 Neutral 18.9 19.4 21.8 10.7 10.4 9.3 2.1 1.7 1.5 21.5 18.2 17.1
Tata Comm 1,767 Neutral 46.4 55.2 79.6 38.0 32.0 22.2 20.0 13.4 8.8 65.7 50.2 48
Vodafone Idea 17 Neutral -10.5 -8.3 -7.4 -1.6 -2.1 -2.3 -0.5 -0.4 -0.4 NM NM NM
Others 43.7 30.6 24.2 5.3 4.6 4.0 12.2 15.2 16.6
APL Apollo Tubes 1,526 Buy 29.5 48.8 61.0 51.6 31.2 25.0 11.5 8.7 6.6 24.5 31.6 30.0
Coromandel Int. 1,245 Buy 63.1 70.2 74.3 19.7 17.7 16.7 3.9 3.3 2.9 21.5 20.3 18.5
EPL 201 Buy 7.6 11.7 14.3 26.4 17.1 14.0 3.1 2.8 2.5 11.8 17.0 18.6
Godrej Agrovet 558 Neutral 17.3 20.5 22.4 32.2 27.2 24.8 4.3 4.0 3.7 13.8 15.3 15.5
Havells India 1,361 Buy 20.5 26.2 31.3 66.3 52.0 43.5 11.4 10.0 8.7 17.3 19.3 20.0
Indiamart Inter. 2,725 Buy 50.1 67.0 84.1 54.4 40.7 32.4 7.2 6.4 5.7 14.1 16.7 18.6
Indian Hotels 436 Buy 8.3 9.8 10.8 52.5 44.7 40.4 6.8 6.0 5.3 13.9 14.3 13.9
Info Edge 5,148 Neutral 62.8 68.6 81.7 82.0 75.1 63.0 5.6 5.2 5.2 6.2 13.1 0.0
Interglobe Aviation 2,976 Neutral 177.4 229.8 244.5 16.8 12.9 12.2 212.8 12.2 6.1 -237.3 178.4 66.8
Kajaria Ceramics 1,309 Buy 27.9 34.4 40.7 47.0 38.0 32.2 8.2 7.6 6.8 18.2 20.6 22.1
Lemon Tree Hotel 119 Buy 1.7 3.4 4.0 71.8 34.8 30 9.4 7.4 5.9 14.1 23.9 22.1
One 97 Comm. 646 Buy -16.3 -0.8 12.4 -39.7 -772.7 52 3.2 3.3 3.2 -8.1 -0.4 6.3
P I Industries 3,475 Buy 103.0 122.4 143.5 33.7 28.4 24.2 6.1 5.1 4.3 19.8 19.7 19.3
SRF 2,467 Neutral 51.1 75.9 91.3 48.3 32.5 27.0 6.4 5.5 4.7 13.9 18.3 18.9
Tata Chemicals 1,118 Neutral 56.4 54.2 62.2 19.8 20.6 18.0 1.4 1.3 1.2 7.1 6.5 7.1
UPL 592 Neutral 13.8 34.4 59.8 43.0 17.2 9.9 1.1 1.0 0.9 3.8 9.0 14.4
Voltas 978 Buy 14.8 20.9 27.7 66.1 46.8 35.3 5.6 5.1 4.6 8.4 10.9 12.9
Zomato 125 Buy 0.3 1.0 2.6 445.9 121.8 48.0 5.4 5.2 4.7 1.2 4.4 10.3

January 2024 38
 On a roll!

Sectors & Companies

BSE Sensex: 71,848 Nifty 50: 21,659 January 2024

Sector and Companies Preview Compendium

Automobiles Healthcare
Capital Goods Infrastructure
Cement Logistics
Chemicals-Specialty Metals
Consumer Oil & Gas
EMS Real Estate
Financials – Banks Retail
Financials – NBFC: Lending Technology
Financials – NBFC: Non Lending Telecom
Others

Note: In our quarterly performance tables, our four-quarter numbers may not always add up to the
full-year numbers. This is because of differences in classification of account heads in the company’s
quarterly and annual results or because of differences in the way we classify account heads as opposed
to the company. All stock prices and indices as on 1 January 2024, unless otherwise stated.

January 2024 39
 December 2023 Results Preview | Sector: Automobiles

Automobiles
Company Gross margin to contract sequentially as RM prices inch up…
Amara Raja Energy Mobility
…however, volumes to grow across all segments (ex-tractors) in 3QFY24
Ashok Leyland
Bajaj Auto  The third quarter witnessed healthy demand across the segments, as volumes are
Bharat Forge expected to grow 18% YoY. The 2Ws outperformed other segments and is likely to rise
BOSCH ~20% YoY. Volumes for 3Ws, PV, and CV are likely to improve ~15%, 12%, and 3% YoY,
Ceat respectively, while the same should decline 4% YoY for tractors. Overall exports are
Craftsman Automation anticipated to recover gradually as the supply chain situation improves further,
Eicher Motors followed by improving macro outlook in key geographies.
 Commodity prices have remained favorable over the last few quarters. Inflationary
Endurance Technologies
pressures peaked in 3QFY23, following which, prices corrected for most of the
Escorts
commodities. Despite a slight increase in some of the RM prices sequentially, we
Exide Industries
expect gross margin to improve ~100bp YoY for our OEM coverage universe in 3QFY24.
Hero MotoCorp
 We estimate EBITDA margin to improve YoY for the seventh successive quarter, with a
Mahindra CIE
160bp YoY gain (+40bp QoQ) for our Auto OEM Universe (ex-JLR). This will be driven
Mahindra & Mahindra
by better gross margin, cost efficiencies, and operating leverage. The benefit of
Maruti Suzuki
healthy growth in underlying industries coupled with cost efficiencies should also
Motherson Sumi Systems
result in strong earnings growth for our Ancillary coverage during the quarter.
Sona BLW Precision
 There has not been any material change in the FY24 earnings estimate for our
Tata Motors
coverage universe. We are already witnessing a reversal in demand patterns,
TVS Motor Company
especially in the 2Ws, wherein we anticipate a high growth potential. As compared to
Tube Investments other categories, 2Ws have a relatively better scope for growth over FY23-26E. On the
other hand, we turn cautious about the PV growth outlook due to a slowdown in
demand trends and a high base.

Healthy volume growth across segments with a strong recovery in 2Ws demand
The third quarter witnessed healthy demand across the segments, as volumes are
expected to grow 18% YoY. The 2Ws outperformed other segments and is likely to
rise ~20% YoY, driven by 24%/9% YoY growth in domestic/exports. Dispatches for
SUVs to remain healthy led by order book execution and improvement in supply
chain situation. However, the lower-end PVs continued to witness subdued demand.
As a result, we expect PV volumes to grow ~12% YoY, with a 30% YoY growth in
SUVs and a decline of 7% YoY in lower-end PVs. CV wholesale is likely to grow ~3%
YoY driven by better demand in underlying industries and a healthy fleet utilization
level. Within CVs, MHCV/LCVs are likely to grow 6%/2% YoY. Tractor wholesale is
expected to decline 4% YoY due to lower rainfall and a higher base of last year. The
3W volumes are expected to grow 15% YoY as demand has come back to normal.
Overall exports are anticipated to recover gradually as the supply chain situation
improves further, followed by improving macro outlook in key geographies.
EBITDA margin expansion continues on a YoY basis
We estimate EBITDA margin to improve YoY for the seventh successive quarter, with
a 160bp YoY gain (+40bp QoQ) for our Auto OEM Universe (ex-JLR). This will be
driven by better gross margin, cost efficiencies, and operating leverage. Though
gross margin is expected to improve ~100bp YoY led by lower RM costs and product
mix, it is likely to contract ~30bp sequentially because of a slight increase in the key
commodity prices. We are now modeling a slender increase in key commodity prices
in the coming quarter. The benefit of a healthy growth in underlying industries
Amber Shukla – Research Analyst (Amber.Shukla@MotilalOswal.com)
Aniket Desai – Research Analyst (Aniket.Desai@MotilalOswal.com)
 December 2023 Results Preview | Sector: Automobiles

coupled with cost efficiencies should also result in strong earnings growth for our
Ancillary coverage during the quarter.
Expect 2Ws to outperform other segments; MHCV to remain stable
We are already witnessing a reversal in demand patterns, especially in the 2Ws,
wherein we anticipate a high growth potential. As compared to other categories,
2Ws have a relatively better scope for growth over FY23-26E. On the other hand, we
turn cautious about the PV growth outlook due to a slowdown in demand trends
and a high base. However, commodity prices have remained favorable over the last
few quarters. Inflationary pressures peaked in 3QFY23, following which, prices
corrected for most of the commodities. We expect a volume CAGR of 9-11%/5-7%/
3-5% for 2Ws/PVs/Tractors over FY23-26. For 3Ws/LCVs/M&HCVs, we anticipate a
volume CAGR of 13-15%/3-5%/6-8% over the same period.
Valuation and view
There has not been any material change in the FY24 earnings estimate for our
coverage universe. We maintain HMCL as our top pick in the OEMs, while we have
added MM as another preferred pick due to the strong momentum in its core SUV
segment, better growth visibility in tractor demand for FY25, and incremental value
to its e-PV business. Among Ancillaries, we prefer: i) ENDU, as it is a proxy play to
the domestic 2W industry, and ii) CRAFTSMA, due to expectations of strong growth
and a superior capital efficiency.

Exhibit 1: Summary of expected quarterly performance (INR m)

SALES (INR M) EBDITA (INR M) NET PROFIT (INR M)
CMP
RECO Var Var Var Var Var Var
Sector (INR) Dec-23 Dec-23 Dec-23
% YoY % QoQ % YoY % QoQ % YoY % QoQ
Amara Raja Energy 825 Neutral 28,482 8.0 1.3 3,845 -3.1 -0.6 2,127 -4.6 -0.8
Apollo Tyres 453 Buy 63,500 -1.1 1.1 11,170 22.3 -3.7 4,368 49.6 -9.5
Ashok Leyland 186 Buy 91,800 1.7 -4.8 9,598 20.4 -11.1 4,893 37.1 -15.2
Bajaj Auto 6701 Neutral 1,20,967 29.9 12.2 24,255 36.5 13.7 20,447 37.1 11.4
Balkrishna Inds 2574 Neutral 23,336 5.3 3.9 5,717 35.1 4.3 3,546 256.4 5.9
Bharat Forge 1247 Buy 23,429 20.0 4.2 6,392 29.5 3.7 3,737 30.7 7.5
Bosch 22417 Neutral 42,089 15.0 1.9 4,863 20.5 -1.0 3,830 20.1 -4.8
CEAT 2431 Buy 29,999 10.0 -1.7 4,365 83.7 -4.3 1,778 397.9 -14.5
CIE Automotive 496 Buy 24,570 9.4 7.8 3,797 29.9 9.9 2,212 32.9 18.5
Craftsman Auto 5330 Buy 12,103 61.6 2.6 2,509 58.5 5.6 1,001 94.0 5.9
Eicher Motors 4035 Neutral 40,217 8.1 -2.3 10,899 27.1 0.3 9,646 30.2 -5.1
Endurance Tech. 1915 Buy 26,324 25.6 3.4 3,461 44.5 9 1,758 62.4 13.7
Escorts Kubota 2967 Neutral 24,920 10.1 21.8 3,583 88.2 36.1 3,036 62.9 29.2
Exide Inds. 322 Buy 40,946 20.0 -0.3 4,729 17.9 -2.1 2,699 20.9 -5.9
Hero Motocorp 4116 Buy 96,375 20.0 2.0 13,421 45.2 1.0 10,392 46.2 -1.4
Mahindra & Mahindra 1704 Buy 2,55,002 17.8 4.9 32,426 15.2 5.8 23,316 14.9 -32.5
Maruti Suzuki 10282 Buy 3,34,717 15.2 -9.7 40,678 43.6 -15.0 30,721 30.7 -17.3
Samvardhana Motherson 106 Buy 2,53,565 25.1 8.0 23,531 45.6 24.6 8,595 89.1 90.6
Motherson Wiring 62 Buy 20,415 21.0 -3.0 2,551 42.5 2.8 1,628 53.4 4.5
MRF 129439 Sell 61,438 11.0 0.9 11,208 104.3 -0.7 5,556 228.4 -2.9
Sona BLW Precis. 645 Neutral 7,818 14.1 -1.1 2,173 16.8 -2.7 1,258 17.4 -2.2
Tata Motors 791 Buy 10,73,922 21.4 2.2 1,37,579 42.7 0.2 35,078 18.6 -9.1
Tube Investments 3576 Buy 20,402 19.3 3.6 2,696 25.8 7.3 1,882 36.7 3.7
TVS Motor 2019 Neutral 82,618 26.2 1.4 9,464 43.6 5.2 5,470 55.1 2.0
Automobiles 27,98,953 18.6 1.4 3,74,911 37.8 0.9 1,88,978 35.4 -7.7

January 2024 41
 December 2023 Results Preview | Sector: Automobiles

Exhibit 2: Volume snapshot 3QFY24 (‘000 units)

Volume snapshot ('000 units) 3QFY24E 3QFY23 YoY (%) 2QFY24 QoQ (%) FY24E FY23 YoY (%)
Two wheelers 5,666 4,705 20 5,487 3 21,167 19,533 8
Three wheelers 265 230 15 277 -4 1,045 870 20
Passenger cars 495 534 -7 517 -4 2,073 2,161 -4
UVs & MPVs 743 571 30 744 0 2,914 2,392 22
Total PVs 1,237 1,105 12 1,261 -2 4,986 4,553 10
M&HCV 96 91 6 99 -2 412 381 8
LCV 158 155 2 166 -5 652 659 -1
Total CVs 254 246 3 265 -4 1,064 1,040 2
Tractors 249 258 -4 216 15 972 986 -1
Total (ex-Tractor) 7,423 6,287 18 7,290 2 28,262 25,997 9
Source: Company, MOFSL
Exhibit 3: Commodity prices inched up sequentially Exhibit 4: Trends in key currencies vs. INR (average, indexed)

1QFY23 1QFY24 2QFY24 3QFY24 Spot 120 USD GBP JPY

110
106
94
81
80

100
74
104

73
100

100

100

100

100

100
93

83
82
81

75
103

100

90
86
83

79

84

95

96

77

86

76

73

80
Copper
Steel (HRC)

Lead

Polymer
Aluminium

Rubber

1QFY22

2QFY22

3QFY22

4QFY22

1QFY23

2QFY23

3QFY23

4QFY23

1QFY24

2QFY24

3QFY24

Spot
Exhibit 5: EBITDA margin expected to improve 160bp YoY Exhibit 6: Trends in segment-wise EBITDA margins (%)

Aggregate (excl JLR) 3QFY23 4QFY23 1QFY24 2QFY24 3QFY24

14.0

9.0

4.0

-1.0

-6.0
10.4
10.5

11.7
11.4

10.5

10.6
14.1
14.6
14.9
15.4
15.7

9.9

8.6

9.6

9.7
2QFY21

3QFY23
3QFY20
4QFY20
1QFY21

3QFY21
4QFY21
1QFY22
2QFY22
3QFY22
4QFY22
1QFY23
2QFY23

4QFY23
1QFY24
2QFY24
3QFY24

2W Cars CVs
Source: MOFSL Source: MOFSL
Exhibit 7: Operating leverage and cost efficiencies to drive EBITDA margin expansion on a YoY basis
Volumes ('000 units) EBITDA Margins (%) Adj PAT (INR M)
YoY QoQ YoY QoQ YoY QoQ
3QFY24 3QFY23 2QFY24 3QFY24 3QFY23 2QFY24 3QFY24 3QFY23 2QFY24
(%) (%) (bp) (bp) (%) (%)
Bajaj Auto 1,201 983 22.1 1,054 14.0 20.1 19.1 100 19.8 30 20,447 14,914 37.1 18,361 11.4
Hero MotoCorp 1,460 1,240 17.8 1,417 3.1 13.9 11.5 240 14.1 -10 10,392 7,111 46.2 10,538 -1.4
TVS Motor 1,101 879 25.2 1,074 2.5 11.5 10.1 140 11.0 40 5,470 3,527 55.1 5,366 2.0
Maruti Suzuki 501 466 7.6 552 -9.2 12.2 9.8 240 12.9 -80 30,721 23,513 30.7 37,165 -17.3
M&M 313 282 11.1 302 3.6 12.7 13.0 -30 12.6 10 23,316 20,290 14.9 34,519 -32.5
TTMT India CV** 97 95 2.4 107 -8.9 9.4 8.5 80 10.4 -100 11,126 9,380 18.6 15,270 -27.1
TTMT India PV** 138 132 4.6 139 -0.4 7.0 7.0 0 6.4 60 2,908 3,210 -9.4 2,980 -2.4
JLR 113 92 22.7 109 3.8 15.1 11.9 320 14.9 20 317 261 21.5 272 16.6
Tata Motors (Cons) 12.8 10.9 190 13.1 -20 35,078 29,581 18.6 38,592 -9.1
Ashok Leyland 47 48 -0.7 50 -5.2 10.5 8.8 160 11.2 -70 4,893 3,568 37.1 5,769 -15.2
Eicher - RE 228 221 3.0 229 -0.5 27.7 23.9 380 27.9 -20 8,722 6,807 28.1 9,385 -7.1
Eicher - VECV 21 18 14.0 20 5.9 8.3 6.9 140 7.9 40 2,103 1,176 78.8 1,850 13.7
Aggregate ** 5,167 4,366 18.4 5,042 2.5 12.7 11.2 160 12.3 40 1,23,137 92,922 32.5 1,33,100 -7.5
*JLR (in GBP m)

January 2024 42
 December 2023 Results Preview | Sector: Automobiles

Exhibit 8: Our revised estimates

FY24E FY25E
Rev Old Chg (%) Rev Old Chg (%)
BJAUT 282.6 276.1 2.3 315.2 309.0 2.0
HMCL 199.7 201.0 -0.6 215.7 213.2 1.2
TVSL 44.2 45.1 -2.1 54.7 53.0 3.1
EIM * 147.5 148.6 -0.8 167.2 168.7 -0.9
MSIL * 450.8 450.8 0.0 460.9 470.7 -2.1
MM 89.4 90.7 -1.4 94.4 95.6 -1.3
TTMT * 43.2 44.4 -2.7 49.5 44.5 11.3
AL 8.8 9.2 -3.6 10.9 11.5 -4.8
ESCORTS 90.3 90.9 -0.6 104.4 106.3 -1.8
AMRJ 47.8 48.7 -2.0 53.7 53.7 0.0
EXID 12.9 12.8 0.9 15.8 15.0 5.8
BOSCH 558 562 -0.8 716 687.4 4.1
ENDU 48.5 47.5 2.1 61.9 60.0 3.1
MACA 26.5 27.1 -2.0 30.7 31.5 -2.6
BHFC 27.7 27.6 0.3 40.2 38.6 3.9
MOTHERSO * 4.3 4.3 -1.1 5.1 5.0 3.8
SONACOMS 8.9 8.9 0.3 11.6 11.6 0.0
CEAT 173.9 162.9 6.8 181.9 186.7 -2.6
APTY * 27.9 28.0 -0.3 33.0 33.3 -1.0
BIL 71.7 71.1 0.9 94.9 95.6 -0.7
MRF 5,385.8 5,331.3 1.0 5,360.8 5,258.1 2.0
MSUMI 1.4 1.4 0.7 1.8 1.8 0.7
TIINDIA 59.2 59.2 0.1 73.2 71.2 2.8
CRAFTSMA 186.8 186.0 0.4 232.4 224.9 3.3
* Consolidated; Source: MOFSL

Exhibit 9: Relative performance – three months (%) Exhibit 10: Relative performance – one year (%)
Nifty Index MOFSL Automobiles Index Nifty Index MOFSL Automobiles Index
119 160

113 140

107 120

101 100

95 80
Jun-23
Dec-22

Mar-23

Sep-23

Dec-23
Nov-23
Sep-23

Dec-23
Oct-23

Source: Bloomberg, MOFSL Source: Bloomberg, MOFSL

January 2024 43
 December 2023 Results Preview | Sector: Automobiles

Exhibit 11: Comparative valuations

CMP EPS (INR) PE (x) PB (x) ROE (%)
Company Name INR Reco FY24E FY25E FY26E FY24E FY25E FY26E FY24E FY25E FY26E FY24E FY25E FY26E
Automobiles 24.2 21.5 18.8 4.8 4.0 3.5 20.0 18.8 18.5
Amara Raja Energy 825 Neutral 47.8 53.7 56.4 17.3 15.4 14.6 2.4 2.2 1.9 14.6 14.8 14.0
Apollo Tyres 453 Buy 27.9 33.0 36.6 16.2 13.7 12.4 1.6 1.4 1.3 13.0 13.8 13.6
Ashok Leyland 186 Buy 8.8 10.9 12.1 21 17 15.3 5.2 4.2 3.4 27.5 27.4 24.6
Bajaj Auto 6,701 Neutral 282.6 315.2 351.2 23.7 21.3 19.1 6.7 6.1 5.6 29.9 30.2 30.6
Balkrishna Inds 2,574 Neutral 71.7 94.9 118.1 35.9 27.1 21.8 5.9 5.2 4.5 17.4 20.5 22.1
Bharat Forge 1,247 Buy 27.7 40.2 44.6 45.0 31.0 27.9 7.5 6.3 5.2 17.9 22.0 20.4
Bosch 22,417 Neutral 557.7 715.6 815.4 40.2 31.3 27.5 5.3 4.9 4.4 14.1 16.3 17.0
CEAT 2,431 Buy 173.9 181.9 202.6 14.0 13.4 12.0 2.4 2.1 1.8 18.7 16.7 16.0
CIE Automotive 496 Buy 22.3 26.5 30.7 22.3 18.7 16.1 3.2 2.9 2.5 15.5 16.3 16.5
Craftsman Auto 5,330 Buy 186.8 232.4 289.2 28.5 22.9 18.4 6.5 5.1 4.1 25.3 24.9 24.7
Eicher Motors 4,035 Neutral 147.5 167.2 195.2 27.4 24.1 20.7 6.2 5.3 4.4 24.6 23.6 23.2
Endurance Tech. 1,915 Buy 48.5 61.9 72.0 39.5 31.0 26.6 5.4 4.7 4.1 14.5 16.3 16.4
Escorts Kubota 2,967 Neutral 90.3 104.4 119.9 32.9 28.4 24.7 4.0 3.5 3.1 12.7 13.1 13.3
Exide Inds. 322 Buy 12.9 15.8 18.4 24.9 20.3 17.5 2.3 2.1 1.9 9.1 10.3 10.9
Hero Motocorp 4,116 Buy 199.7 215.7 242.4 20.6 19.1 17.0 4.4 4.0 3.5 22.7 22.0 22.0
Mahindra & Mahindra 1,704 Buy 89.4 94.4 104.7 19.1 18.1 16.3 3.9 3.4 2.9 22.5 20.2 19.3
Maruti Suzuki 10,282 Buy 443.3 460.9 508.2 23.2 22.3 20.2 4.4 3.4 3.0 18.7 15.1 14.8
Motherson Wiring 62 Buy 1.4 1.8 2.1 44.2 34.6 30.0 16.5 13.2 10.9 41.5 42.3 39.7
MRF 129,439 Sell 5,385.8 5,360.8 5,929.5 24.0 24.1 21.8 3.2 2.9 2.5 14.4 12.6 12.4
Samvardhana Moth. 106 Buy 4.3 5.1 5.7 24.7 20.6 18.5 2.9 2.7 2.4 12.4 13.5 13.6
Sona BLW Precis. 645 Neutral 8.9 11.6 13.8 72.2 55.8 46.7 14.2 12.1 10.3 21.1 23.4 23.8
Tata Motors 791 Buy 43.2 49.5 61.1 18.3 16.0 12.9 5.0 3.8 3.0 31.4 26.6 25.7
Tube Investments 3,576 Buy 59.2 73.2 83.6 60.4 48.8 42.7 14.0 11.3 9.2 25.8 25.6 23.7
TVS Motor 2,019 Neutral 43.9 53.5 62.5 46.0 37.7 32.3 12.2 9.5 7.5 30.0 28.4 26.0

January 2024 44
 December 2023 Results Preview | Sector: Automobiles

The tables below provide a snapshot of actual and estimated numbers for companies under the MOFSL coverage
universe. Highlighted columns indicate the quarter/financial year under review.
Amara Raja Energy Mobility Neutral
CMP: INR825 | TP: INR780 (-6%) EPS CHANGE (%): FY24|25E: -2|0
 Revenue growth of 8% YoY to be driven by the OEM  EBITDA margin should see a sequential contraction due
demand from 2Ws/4Ws and the aftermarket division. to a lag effect of lead prices that remained elevated in
Industrial division would see an uptick due to the 5G 2Q, but softened in 3Q despite operating leverage
expansion by telecom players. benefits.
 We have raised our target multiple to 14x from 12x to
factor in better demand from the underlying segments.
Quarterly Performance (INR m)
Y/E March (INR m) FY23 FY24E FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
Net Sales 26,200 26,995 26,372 24,292 27,699 28,108 28,482 27,744 1,03,859 1,12,034
YoY Change (%) 38.9 19.2 11.5 11.4 5.7 4.1 8.0 14.2 19.4 7.9
RM Cost (% of sales) 73.4 69.5 66.6 67.0 71.1 68.4 69.0 68.9 69.2 69.4
Staff Cost (% of sales) 5.1 5.6 6.1 6.0 5.8 5.8 5.7 5.9 5.7 5.8
Other Exp (% of sales) 11.5 11.6 12.2 13.1 10.3 12.1 11.8 12.2 12.1 11.6
EBITDA 2,609 3,602 3,969 3,373 3,535 3,870 3,845 3,617 13,552 14,867
Margins (%) 10.0 13.3 15.0 13.9 12.8 13.8 13.5 13.0 13.0 13.3
Depreciation 963 1,019 1,145 1,145 1,111 1,148 1,155 1,163 4,272 4,577
Interest 46 54 58 62 56 62 65 62 221 245
Other Income 170 237 261 226 216 275 220 229 893 940
PBT before EO expense 1,770 2,765 3,026 2,392 2,584 2,935 2,845 2,622 9,952 10,985
Extra-Ord expense 0 0 0 477 0 0 0 0 477 0
PBT after EO 1,770 2,765 3,026 1,915 2,584 2,935 2,845 2,622 9,476 10,985
Tax 455 744 798 535 659 791 718 660 2,532 2,829
Tax Rate (%) 25.7 26.9 26.4 28.0 25.5 27.0 25.3 25.2 26.7 25.8
Adj PAT 1,315 2,022 2,228 1,729 1,925 2,143 2,127 1,962 7,293 8,156
YoY Change (%) 6.1 40.3 54.0 75.5 46.4 6.0 -4.6 13.4 42.7 11.8
E: MOFSL Estimates

Apollo Tyres Buy

CMP: INR453 | TP: INR535 (+18%) EPS CHANGE (%): FY24|25E: 0|-1
 Overall revenue growth is expected to remain flat YoY.  Rubber prices in 3Q remained at elevated levels and spot
While standalone business revenue is expected to grow prices have also started inching up, which would lead to a
3.5% YoY, revenue from the EU operations is expected to 90bp contraction in EBITDA margin to 17.6% sequentially.
decline 10% YoY. For India business, demand momentum The EU business margin is likely to expand 60bp QoQ to
is expected to be driven by stable OEM demand. 14.7%.
Consol. Quarterly Performance (INR m)
Y/E March FY23 FY24E FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE 3QE
Net Revenues 59,420 59,560 64,228 62,473 62,446 62,797 63,500 65,631 2,45,681 2,54,374 66,779
YoY Change (%) 29.6 17.3 12.5 12.0 5.1 5.4 -1.1 5.1 17.3 3.5 4.0
Total Expenditure 52,522 52,440 55,094 52,489 51,931 51,198 52,331 54,157 2,12,545 2,09,616 54,993
EBITDA 6,898 7,120 9,134 9,985 10,515 11,599 11,170 11,475 33,137 44,758 11,786
Margins (%) 11.6 12.0 14.2 16.0 16.8 18.5 17.6 17.5 13.5 17.6 17.6
Depreciation 3,437 3,485 3,544 3,724 3,620 3,603 3,650 3,688 14,191 14,560 3,650
Interest 1,182 1,320 1,420 1,390 1,355 1,328 1,340 1,356 5,312 5,379 1,340
Other Income 106 69 67 169 355 253 220 222 411 1,051 220
PBT before EO expense 2,384 2,383 4,237 5,039 5,896 6,922 6,400 6,653 14,044 25,870 7,016
Extra-Ord expense 0 0 0 -226 132 122 0 0 -226 254 0
PBT 2,384 2,383 4,237 5,265 5,764 6,800 6,400 6,653 14,269 25,616 7,016
Tax Rate (%) 20.0 24.8 31.1 22.1 31.1 30.3 31.7 32.7 22.6 31.5 30.6
Reported PAT 1,907 1,794 2,921 4,103 3,969 4,744 4,368 4,474 11,046 17,555 4,866
Adj PAT 1,907 1,794 2,921 3,928 4,059 4,826 4,368 4,474 10,872 17,747 4,866
YoY Change (%) 48.4 1.6 30.5 245.9 112.9 169.0 49.6 13.9 69.0 63.2 66.6
Margins (%) 3.2 3.0 4.5 6.3 6.5 7.7 6.9 6.8 4.4 7.0 7.3
E: MOFSL Estimates

January 2024 45
 December 2023 Results Preview | Sector: Automobiles

Ashok Leyland Buy

CMP: INR186 | TP: INR215 (+16%) EPS CHANGE (%): FY24|25E: -4|-5
 Overall volumes remained flat YoY (-5% QoQ) in 3Q partly  EBITDA margin is likely to contract sequentially by 70bp to
due to increased competitive intensity and high base 10.5% due to operating deleverage and slightly higher RM
effect. costs.
 Net price realization is likely to improve, led by stable  We downgrade our FY24E/FY25E EPS to factor in lower-
discounts during the quarter. than-expected MHCV demand.
Quarterly Performance (S/A) (INR m)
FY23 FY24E FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
Total Volumes (nos) 39,651 45,295 47,562 59,697 41,329 49,846 47,241 64,411 1,92,205 2,02,827
Growth % 120.4 64.5 39.6 22.5 4.2 10.0 -0.7 7.9 49.8 5.5
Realizations (INR '000) 1,822 1,825 1,899 1,947 1,981 1,934 1,943 2,058 1,880 1,985
Change (%) 11.0 12.8 16.9 8.5 8.8 6.0 2.4 5.7 11.3 5.6
Net operating revenues 72,229 82,660 90,297 1,16,257 81,893 96,380 91,800 1,32,581 3,61,441 4,02,655
Change (%) 144.8 85.4 63.1 33.0 13.4 16.6 1.7 14.0 66.7 11.4
RM/sales % 79.3 78.0 76.3 75.6 73.7 73.5 73.7 74.0 77.1 73.8
Staff/sales % 6.2 6.4 6.1 5.1 6.6 5.9 6.3 4.8 5.8 5.8
Other exp/sales % 10.1 9.1 8.8 8.3 9.7 9.3 9.5 8.6 9.0 9.2
EBITDA 3,203 5,373 7,973 12,757 8,208 10,798 9,598 16,794 29,307 45,398
EBITDA Margins(%) 4.4 6.5 8.8 11.0 10.0 11.2 10.5 12.7 8.1 11.3
Interest 689 771 804 628 699 587 620 619 2,891 2,525
Other Income 256 200 316 389 512 475 400 434 1,161 1,820
Depreciation 1,824 1,768 1,890 1,838 1,794 1,803 1,850 1,878 7,320 7,325
PBT before EO Item 946 3,035 5,596 10,681 6,227 8,883 7,528 14,731 20,258 37,369
EO Exp/(Inc) -130 -82 -69 -564 6 229 0 0 -846 235
PBT after EO 1,077 3,117 5,665 11,245 6,221 8,654 7,528 14,731 21,104 37,134
Effective Tax Rate (%) 36.8 36.1 36.2 33.2 7.3 35.2 35.0 35.6 34.6 30.7
Adj PAT 595 1,939 3,568 7,145 5,768 5,769 4,893 9,485 13,248 25,906
Change (%) -121.2 -333.0 -1,054.2 70.8 868.8 197.5 37.1 32.7 7,587.8 95.5
E: MOFSL Estimates

Bajaj Auto Neutral

CMP: INR6,701 | TP: INR6,160 (-8%) EPS CHANGE (%): FY24|25E: 2|2
 Export volumes, despite declining 3% YoY (+2% QoQ), are  Margin to expand 30bp QoQ (+100bp YoY) majorly led by
showing a gradual recovery due to improvement in global improved mix and operating leverage.
macros.  We have upgraded our target multiple to 18x from 16x to
 The festival season and the low base of last year (due to factor in the success of Triumph in the premium segment
early festival inventory stocking in 2Q) led 2W domestic category and export recovery.
volumes to grow 44% YoY.
Quarterly Performance (INR m)
FY23 FY24E FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
Volumes ('000 units) 934 1,151 983 860 1,027 1,054 1,201 1,201 3,928 4,483
Growth YoY (%) -7.2 0.6 -16.8 -12.0 10.0 -8.4 22.1 39.7 (8.8) 14.1
Realization (INR/unit) 85,739 88,642 94,720 1,03,573 1,00,347 1,02,256 1,00,722 1,03,878 92,742 1,01,842
Growth YoY (%) 16.8 17.7 24.0 26.8 17.0 15.4 6.3 0.3 21.1 9.8
Net Sales 80,050 1,02,028 93,151 89,047 1,03,098 1,07,773 1,20,967 1,24,736 3,64,276 4,56,573
Change (%) 8.4 18.4 3.3 11.7 28.8 5.6 29.9 40.1 10.4 25.3
EBITDA 12,970 17,587 17,768 17,166 19,539 21,329 24,255 25,211 65,491 90,334
EBITDA Margins (%) 16.2 17.2 19.1 19.3 19.0 19.8 20.1 20.2 18.0 19.8
Other Income 3,193 3,332 2,691 2,598 3,463 3,614 3,700 3,813 11,814 14,590
Interest 43 109 85 157 121 65 100 114 395 400
Depreciation 673 670 740 742 835 876 880 886 2,824 3,477
PBT after EO 15,447 20,140 19,635 18,865 22,046 24,000 26,975 28,025 74,086 1,01,047
Effective Tax Rate (%) 24.0 24.0 24.0 24.0 24.5 23.5 24.2 24.2 24.0 24.1
Adj. PAT 11,733 15,300 14,914 14,329 16,648 18,361 20,447 21,232 56,276 76,688
Change (%) 10.6 31.3 22.8 16.9 41.9 20.0 37.1 48.2 20.6 36.3
E: MOFSL Estimates

January 2024 46
 December 2023 Results Preview | Sector: Automobiles

Balkrishna Industries Neutral

CMP: INR2,574 | TP: INR2,475 (-4%) EPS CHANGE (%): FY24|25E: 1|-1
 Revenue is expected to grow 5% YoY driven by 10% YoY  Gross margin is expected to remain flat on a sequential
growth in volumes, while ASPs are likely to see a 4% YoY basis but would see a 320bp improvement YoY.
decline. Volume growth to be driven by domestic markets Overall, EBITDA margin would remain range bound at
and a gradual recovery in export markets. ~24.5% levels.
Quarterly Earning Model (Standalone) (INR m)
Y/E March FY23 FY24E FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
Volumes (Ton) 83,153 78,872 66,480 72,676 67,209 70,585 73,128 79,278 3,01,181 2,90,200
YoY Change (%) 21.2 8.4 -5.5 -5.8 -19.2 -10.5 10.0 9.1 4.3 -3.6
Realizations (INR '000/ton) 327.9 355.8 333.2 319.9 314.7 318.3 319.1 320.3 334.4 318.2
YoY Change (%) 23.0 24.5 12.7 1.4 -4.0 -10.5 -4.2 0.1 14.7 -4.8
Net Revenues 27,263 28,063 22,153 23,246 21,150 22,468 23,336 25,396 1,00,725 92,351
YoY Change (%) 49.1 34.9 6.6 -4.4 -22.4 -19.9 5.3 9.2 19.6 -8.3
EBITDA 5,470 5,640 4,233 4,942 4,863 5,480 5,717 6,387 20,284 22,447
Margins (%) 20.1 20.1 19.1 21.3 23.0 24.4 24.5 25.1 20.1 24.3
Depreciation 1,262 1,341 1,449 1,515 1,537 1,586 1,590 1,618 5,566 6,331
Interest 27 43 136 250 208 229 200 176 456 813
Forex loss/(gain) -260 -490 1,660 -30 -330 -250 -250 -250 880 -1,080
Other Income -150 580 430 280 660 520 520 527 1,140 2,227
PBT before EI 4,290 5,327 1,417 3,487 4,108 4,435 4,697 5,370 14,521 18,610
Extra-Ord expense 0 0 0 23 0 0 0 0 23 0
PBT 4,290 5,327 1,417 3,465 4,108 4,435 4,697 5,370 14,499 18,610
Rate (%) 25.4 24.1 29.8 26.1 23.9 24.5 24.5 24.7 25.7 24.4
Reported PAT 3,199 4,043 995 2,559 3,125 3,350 3,546 4,043 10,774 14,065
Adj PAT 3,199 4,043 995 2,576 3,125 3,350 3,546 4,043 10,791 14,065
YoY Change (%) -10.5 1.2 -69.7 -30.5 -2.3 -17.1 256.4 57.0 -25.9 30.3
Margins (%) 11.7 14.4 4.5 11.1 14.8 14.9 15.2 15.9 10.7 15.2
E: MOFSL Estimates

Bharat Forge Buy

CMP: INR1247 | TP: INR1385 (+11%) EPS CHANGE (%): FY24|25E: 0|4
 Tonnage growth is expected to be at 15% YoY led by
 EBITDA margin is expected to improve 200bp YoY (-10bp
stable domestic market demand with expectation of some
QoQ) to 27.3% led by operating leverage benefits.
weakness in the overseas market, especially in autos.
 We have upgraded our target multiple to 28x from 27x to
 Non-autos, in both domestic and export markets, to see
factor in better demand from the underlying segments.
high growth on a YoY basis.
S/A Quarterly (INR m)
FY23 FY24E FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
Tonnage 57,915 61,149 62,755 64,648 67,780 70,316 72,168 75,637 2,46,467 2,85,902
Change (%) 8.2 7.1 17.6 12.3 17.0 15.0 15.0 17.0 11.3 16.0
Realization (INR '000/ton) 303.8 304.8 311.1 308.9 313.9 319.9 324.6 331.1 307.3 322.6
Change (%) 18.5 9.1 3.6 6.2 3.3 4.9 4.4 7.2 9.0 5.0
Net operating income 17,594 18,639 19,521 19,973 21,273 22,494 23,429 25,042 75,727 92,238
Change (%) 28.2 16.8 21.8 19.3 20.9 20.7 20.0 25.4 21.3 21.8
EBITDA 4,600 4,522 4,936 5,226 5,530 6,163 6,392 6,742 19,284 24,827
EBITDA Margins (%) 26.1 24.3 25.3 26.2 26.0 27.4 27.3 26.9 25.5 26.9
Non-Operating Income 259 477 377 391 472 424 450 477 1,505 1,824
Interest 263 357 849 658 705 726 720 674 2,127 2,825
Depreciation 1064 1066 1079 1051 1089 1128 1140 1152 4,260 4,509
Fx loss/(gain) 250 -8 -415 347 43 95 0 0 173 138
PBT after EO items 3,252 3,579 3,844 3,154 4,165 4,616 4,982 5,394 13,827 19,157
Eff. Tax Rate (%) 25.1 25.1 24.8 22.5 25.2 25.0 25.0 25.0 24.4 25.0
Rep. PAT 2,436 2,681 2,892 2,445 3,115 3,460 3,737 4,047 10,454 14,359
Change (%) 46.2 -14.0 -14.3 -6.7 27.9 29.0 29.2 65.5 -3.0 37.3
Adj. PAT 2,460 2,686 2,859 2,754 3,115 3,476 3,737 4,047 10,776 14,375
Change (%) 14.8 -11.5 8.6 4.4 26.7 29.4 30.7 46.9 3.1 33.4
E: MOFSL Estimates

January 2024 47
 December 2023 Results Preview | Sector: Automobiles

Bosch Neutral
CMP: INR22,417 | TP: INR20,115 (-10%) EPS CHANGE (%): FY24|25E: -1|4
 We expect ~15% YoY revenue growth led by growth in  EBITDA margin likely to expand driven by benefit of RM
underlying CV and 2W industries; however, tractor cost pass through, which comes with a quarter lag.
volumes would remain muted. However, higher other expenses due to spending on the
new business would limit this expansion.
Quarterly performance (S/A) (INR m)
Y/E March FY23 FY24E FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
Net Sales 35,444 36,616 36,599 40,634 41,584 41,301 42,089 46,048 1,49,293 1,71,022
YoY Change (%) 45.1 25.5 17.7 22.7 17.3 12.8 15.0 13.3 26.7 14.6
RM Cost (% of sales) 64.6 64.9 60.0 64.0 64.5 66.8 66.3 64.5 63.4 65.5
Staff Cost (% of sales) 7.6 7.5 7.4 8.1 7.4 8.1 7.4 7.3 7.7 7.6
Other Expenses (% of sales) 15.6 16.4 23.3 15.9 17.9 13.2 14.7 15.7 16.8 15.1
EBITDA 4,495 4,311 4,037 5,224 4,679 4,913 4,863 5,778 18,067 20,233
Margins (%) 12.7 11.8 11.0 12.9 11.3 11.9 11.6 12.5 12.1 11.8
Depreciation 648 919 1,083 1,206 921 1,013 1,150 1,222 3,856 4,306
Interest 36 19 20 46 308 122 110 110 121 650
Other Income 566 1,497 1,312 1,359 1,875 1,542 1,450 1,496 4,734 6,363
PBT before EO expense 4,377 4,870 4,246 5,331 5,325 5,320 5,053 5,941 18,824 21,639
Extra-Ord expense 0 0 0 0 0 -7,850 0 0 0 -7,850
PBT after EO Expense 4,377 4,870 4,246 5,331 5,325 13,170 5,053 5,941 18,824 29,489
Tax 1,035 1,146 1,057 1,341 1,235 3,181 1,223 1,439 4,579 7,077
Tax Rate (%) 23.6 23.5 24.9 25.2 23.2 24.2 24.2 24.2 24.3 24.0
Reported PAT 3,342 3,724 3,189 3,990 4,090 9,989 3,830 4,503 14,245 22,412
Adj PAT 3,342 3,724 3,189 3,990 4,090 4,023 3,830 4,503 14,245 16,042
YoY Change (%) 28.7 0.1 35.7 13.8 22.4 8.0 20.1 12.8 17.0 12.6
E: MOFSL Estimates

Ceat
CMP: INR2,431| TP: INR2,960 (+22%)
 Healthy 2W/PV domestic OEM demand coupled with a
gradual recovery in exports would drive revenue growth.
Buy
EPS CHANGE (%): FY24|25E: 7|-3
 The RM basket during 3QFY24 has seen a slight uptick.
This, coupled with operating deleverage, would drag
EBITDA margin by 40bp sequentially to 14.6%.
 We upgrade our FY24E EPS to factor in lower-than-
estimated RM costs.

Consol. Quarterly Performance (INR m)

Y/E March FY23 FY24E FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2QE 3QE 4QE
Net Sales 28,184 28,945 27,272 28,748 29,352 30,533 29,999 30,444 1,13,149 1,20,328
YoY Change (%) 47.8 18.1 13.0 10.9 4.1 5.5 10.0 5.9 20.8 6.3
RM cost (%) 68.3 67.5 65.5 59.9 58.9 56.7 56.9 57.4 65.3 57.5
Employee cost (%) 6.1 5.8 6.7 7.4 6.7 7.1 7.2 7.0 6.5 7.0
Other expenses (%) 19.7 19.7 19.2 19.9 21.2 21.3 21.4 21.3 19.6 21.3
EBITDA 1,653 2,031 2,376 3,678 3,871 4,561 4,365 4,350 9,738 17,147
Margins (%) 5.9 7.0 8.7 12.8 13.2 14.9 14.6 14.3 8.6 14.3
Depreciation 1,114 1,151 1,175 1,253 1,209 1,245 1,260 1,304 4,693 5,018
Interest 521 577 657 666 701 717 700 690 2,421 2,809
Other Income 28 98 20 24 33 105 45 63 169 245
PBT before EO expense 45 401 565 1,783 1,993 2,704 2,450 2,418 2,793 9,565
Exceptional item 7 237 5 86 0 0 0 0 334 0
PBT 38 164 560 1,698 1,993 2,704 2,450 2,418 2,459 9,565
Tax Rate (%) 31.0 64.6 26.7 26.5 26.5 25.3 26.2 26.2 29.2 26.0
MI & Profit of Asso. Cos. -67 -20 57 -90 18 -59 30 56 -120 45
Reported PAT 92 78 354 1,337 1,446 2,080 1,778 1,729 1,862 7,033
Adj PAT 98 246 357 1,398 1,446 2,080 1,778 1,729 2,098 7,033
YoY Change (%) -59 -42 -325 382 1,383 745 398 24 164 235

January 2024 48
 December 2023 Results Preview | Sector: Automobiles

CIE Automotive Buy

CMP: INR496 | TP: INR555 (+12%)
 Standalone business growth of 17% YoY to be driven by
strong volume growth of its customers, MM & TTMT.
However, the EU business is expected to remain muted
due to weakness in Metalcastello.
EPS CHANGE (%): CY23|24E: -1|-2
 Softening RM costs combined with operational efficiencies
to drive margin expansion by 30bp QoQ to 15.5%.

Quarterly performance (Consol.) (INR m)

(INR m) CY22 CY23E CY22 CY23E
Y/E December 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4QE
Net Sales 20,608 22,160 22,294 22,468 24,402 23,203 22,794 24,570 87,530 94,970
YoY Change (%) -5.9 8.5 6.6 34.6 18.4 4.7 2.2 9.4 29.4 8.5
EBITDA 2,804 3,058 2,934 2,924 3,806 3,704 3,454 3,797 11,720 14,762
Margins (%) 13.6 13.8 13.2 13.0 15.6 16.0 15.2 15.5 13.4 15.5
Depreciation 717 747 731 767 825 833 783 822 2,962 3,263
Interest 40 -1 109 79 240 221 310 250 227 1,020
Other Income 107 98 134 244 160 195 200 226 583 781
Share of profit from associates 4 11 3 4 3 -3 -2 9 22 7
PBT before EO expense 2,155 2,409 2,229 2,321 2,901 2,846 2,561 2,952 9,114 11,260
EO Exp/(Inc) 0 0 0 -379 0 0 0 0 -379 0
PBT after EO exp 2,155 2,409 2,229 2,700 2,901 2,846 2,561 2,952 9,492 11,260
Tax Rate (%) 23.9 23.8 24.9 28.0 24.2 24.9 27.0 25.4 25.3 25.3
Adj. PAT 1,643 1,847 1,676 1,664 2,203 2,136 1,867 2,212 6,829 8,418
YoY Change (%) 7.7 35.6 12.4 96.5 34.1 15.7 11.4 32.9 69.3 23.3

Craftsman Auto Buy

CMP: IN5,330 | TP: INR6,050 (+14%) EPS CHANGE (%): FY24|25E: 0|3
 Standalone revenue is expected to grow ~15% YoY led by  AL costs stayed at elevated levels in 3Q and spot prices are
40%/26% growth in AL products/industrial segments. DR moving upwards. However, operating leverage is expected
Axion is likely to grow sequentially led by stable PV OEM to drive EBITDA margin expansion of 60bp sequentially in
demand. the consolidated business.
Quarterly (Consol) (INR m)
FY23 FY24E FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
Net operating income 6,758 7,713 7,490 9,804 10,376 11,791 12,103 13,279 31,826 47,549
Change (%) 56.6 35.6 35.8 49.8 53.5 52.9 61.6 35.5 44.2 49.4
Total Cost 5,124 6,012 5,907 7,919 8,234 9,416 9,594 10,404 24,990 37,647
RM/Sales (%) 47.8 51.2 50.4 54.3 52.5 53.2 53.4 53.0 51.2 53.0
Staff Cost (% of Sales) 8.4 7.4 7.8 6.2 6.5 6.1 6.0 6.0 7.3 6.1
Other Exp. (% of Sales) 19.6 19.3 20.6 20.3 20.4 20.6 19.9 19.3 20.0 20.0
EBITDA 1,634 1,701 1,583 1,884 2,142 2,375 2,509 2,875 6,836 9,902
EBITDA Margins (%) 24.2 22.1 21.1 19.2 20.6 20.1 20.7 21.7 21.5 20.8
Non-Operating Income 13 17 46 49 37 47 50 47 125 182
Interest 254 233 296 419 424 416 430 440 1202 1710
Depreciation 532 547 538 599 683 668 680 691 2216 2722
Minority Int/Share of Profit 0 0 -2 -1 62 97 88 89 21 340
PBT after EO items 861 939 797 916 1,011 1,241 1,361 1,702 3,522 5,311
Eff. Tax Rate (%) 35.5 35.4 35.3 12.4 26.3 23.8 26.5 26.0 29.5 25.7
Rep. PAT 556 606 516 802 745 945 1,001 1,259 2,484 3,945
Change (%) 143.3 22.7 40.2 56.2 34.0 56.0 94.0 56.9 54.8 58.8
Adj. PAT 556 606 516 802 745 945 1,001 1,259 2,484 3,945
Change (%) 143.3 22.7 40.2 56.2 34.0 56.0 94.0 56.9 54.8 58.8
E: MOFSL Estimates

January 2024 49
 December 2023 Results Preview | Sector: Automobiles

Eicher Motors Neutral

CMP: INR4,035 | TP: INR3,815 (-6%) EPS CHANGE (%): FY24|25E: -1|-1
 Overall RE volumes inched up 3% YoY (flat QoQ). Domestic  Weaker mix (lower contribution from exports) would hurt
volumes grew 6% YoY but export volumes declined 24% margins.
YoY, indicating a stress in these markets.  VECV margins likely to improve YoY led by higher CV
volumes and moderating discounts.
Consol. Quarterly Performance
INR m FY23 FY24E FY23 FY24E
Y/E March 1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
Net Operating income 33,975 35,194 37,210 38,043 39,864 41,145 40,217 42,417 1,44,422 1,63,643
Growth (%) 72.1 56.4 29.2 19.1 17.3 16.9 8.1 11.5 40.2 13.3
EBITDA 8,311 8,216 8,572 9,337 10,208 10,872 10,899 11,608 34,436 43,588
EBITDA Margins (%) 24.5 23.3 23.0 24.5 25.6 26.4 27.1 27.4 23.8 26.6
PAT 5,769 6,127 6,770 7,322 8,179 9,146 8,502 9,096 25,988 34,923
Share of JV Loss/(PAT)/ Min. Int. -338 -441 -639 -1,734 -1,004 -1,016 -1,144 -2,247 -3,152 -5,412
Recurring PAT 6,107 6,569 7,408 9,056 9,183 10,163 9,646 11,343 29,139 40,335
Growth (%) 157.5 76.0 62.4 48.4 50.4 54.7 30.2 25.3 73.8 38.4
Standalone (Royal Enfield)
Royal Enfield ('000 units) 187 208 221 219 228 229 228 237 835 922
Growth (%) 51.4 68.3 30.6 17.7 21.6 10.4 3.0 8.5 38.6 10.4
Net Realn (INR '000/unit) 173 164 162 175 171 171 172 175 168 172
Change - YoY (%) 12.4 -7.5 -3.1 1.9 -1.3 4.8 6.0 -0.3 0.2 2.3
Net operating income 32,479 33,972 35,902 38,314 39,012 39,307 39,217 41,418 1,40,666 1,58,954
Growth (%) 70.2 55.7 26.5 19.9 20.1 15.7 9.2 8.1 73.7 41.3
EBITDA 7,882 8,036 8,569 9,448 10,127 10,974 10,862 11,686 33,935 43,649
EBITDA Margins (%) 24.3 23.7 23.9 24.7 26.0 27.9 27.7 28.2 24.1 27.5

Endurance Technologies Buy

CMP: INR1,915 | TP: INR2,160 (+13%) EPS CHANGE (%): FY24|25E: 2|3
 Consolidated revenue growth of 26% YoY to be driven by  Expect QoQ EBITDA margin expansion to be driven by
29% YoY growth in the S/A business due to a recovery in operating leverage and RM cost pass through.
domestic 2W business and a low base of last year. The EU
business outlook has remained weak while Maxwell
operations are expected to ramp-up.
Consolidated – Quarterly performance
Y/E March FY23 FY24E FY23 FY24E
INR m 1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
Net Sales 21,138 23,606 20,952 22,343 24,500 25,450 26,324 26,659 88,040 1,02,933
YoY Change (%) 24.8 25.1 10.9 7.5 15.9 7.8 25.6 19.3 16.6 16.9
RM Cost (% of sales) 60.4 62.3 59.9 59.3 59.1 60.2 60.0 59.5 60.5 59.7
Staff Cost (% of sales) 8.8 7.4 9.2 9.4 8.9 8.3 8.1 8.3 8.7 8.4
Other Exp. (% of sales) 19.4 18.8 19.4 18.5 18.8 19.0 18.8 18.7 19.0 18.8
EBITDA 2,398 2,716 2,395 2,854 3,213 3,183 3,461 3,593 10,363 13,449
Margins (%) 11.3 11.5 11.4 12.8 13.1 12.5 13.1 13.5 11.8 13.1
Depreciation 991 993 1,016 1,216 1,129 1,184 1,195 1,211 4,216 4,719
Interest 19 61 46 80 90 98 92 91 206 371
Other Income 47 84 115 208 166 155 165 179 454 665
PBT before EO expense 1,434 1,747 1,448 1,767 2,159 2,056 2,339 2,471 6,395 9,024
Exceptional Item 103 0 0 0 0 0 0 0 103 0
PBT after EO 1,331 1,747 1,448 1,767 2,159 2,056 2,339 2,471 6,293 9,024
Eff. Tax Rate (%) 22.3 24.7 25.3 22.8 24.3 24.8 24.8 24.0 23.8 24.5
Rep. PAT 1,034 1,315 1,082 1,365 1,635 1,546 1,758 1,878 4,796 6,817
Adj. PAT 1,112 1,315 1,082 1,365 1,635 1,546 1,758 1,878 4,875 6,817
YoY Change (%) -8.3 -1.4 14.4 0.2 47.0 17.5 62.4 37.6 0.4 39.8

January 2024 50
 December 2023 Results Preview | Sector: Automobiles

Escorts Neutral
CMP: INR2,967 | TP: INR2900 (-2%) EPS CHANGE (%): FY24|25E: -1|-2
 3Q witnessed ~3% YoY decline in tractor volumes led by  EBITDA margin is likely to expand 150bp QoQ to 14.4% on
irregular rainfall and weak rural sentiments. the back of better operational efficiencies despite slight
uptick in RM costs.
Standalone Quarterly Performance (INR m)
Y/E March FY23 FY24E FY23 FY24E
1Q 2Q 3QE 4Q 1Q 2Q 3QE 4QE
Net Sales 20,149 18,835 22,637 21,830 23,277 20,462 24,920 24,850 83,450 93,509
YoY Change (%) 20.5 12.2 15.6 16.8 15.5 8.6 10.1 13.8 16.0 12.1
Total Expenditure 18,133 17,308 20,733 19,471 20,008 17,829 21,337 21,431 75,645 80,605
EBITDA 2,016 1,527 1,903 2,358 3,269 2,633 3,583 3,420 7,804 12,904
Margins (%) 10.0 8.1 8.4 10.8 14.0 12.9 14.4 13.8 9.4 13.8
Depreciation 364 365 376 380 402 407 415 423 1,484 1,646
Interest 26 23 26 28 27 24 28 32 103 110
Other Income 354 776 913 763 945 950 925 950 2,806 3,770
PBT 1,981 1,187 2,414 2,470 3,786 3,152 4,065 3,915 8,051 14,918
Rate (%) 25.6 26.1 22.8 24.9 25.3 25.4 25.3 25.2 24.6 25.3
Adj. PAT 1,475 1,425 1,864 2,039 2,828 2,350 3,036 2,929 6,802 11,144
YoY Change (%) -20.4 -19.4 -7.5 0.8 91.8 64.9 62.9 43.7 -11.2 63.8
E: MOFSL Estimates

Exide Industries Buy

CMP: INR322 | TP: INR355 (+10%) EPS CHANGE (%): FY24|25E: 1|2
 Expect revenue growth of 20% YoY to be driven by  Despite softening of lead prices in 3Q by 2% sequentially,
recovery in 2W OE demand and ramp-up in the industrial gross margin would contract due to the lag effect. Lower
division. other expenses would lead to better cost-control
measures.
S/A Quarterly Performance (INR m)
Y/E March FY23 FY24E FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
Net Sales 38,994 37,189 34,121 35,430 40,726 41,067 40,946 42,428 1,45,919 1,65,166
Growth YoY (%) 56.8 13.0 6.7 3.7 4.4 10.4 20.0 19.8 17.6 13.2
Gross operating income 38,994 37,189 34,121 35,430 40,726 41,067 40,946 42,428 1,45,919 1,65,166
Growth YoY (%) 56.8 13.0 6.7 3.7 4.4 10.4 20.0 19.8 17.6 13.2
RM(%) 72.1 69.5 67.7 70.2 71.7 68.9 69.4 69.2 69.9 69.8
Employee cost (%) 5.5 5.9 6.3 6.2 5.8 6.2 6.3 6.1 6.0 6.1
Other Exp(%) 12.5 13.5 14.3 13.3 11.8 13.1 12.8 12.7 13.4 12.6
Total Cost 35,127 33,065 30,111 31,758 36,404 36,235 36,216 37,312 1,30,239 1,46,168
EBITDA 3,866 4,124 4,010 3,672 4,322 4,831 4,729 5,116 15,680 18,998
EBITDA Margin(%) 9.9 11.1 11.8 10.4 10.6 11.8 11.6 12.1 10.7 11.5
Change (%) 48.4 -0.2 7.6 4.9 11.8 17.1 17.9 39.3 12.1 21.2
Non-Operating Income 322 356 234 412 192 392 250 274 1,324 1,108
Interest 64 62 82 83 98 115 115 112 295 440
Depreciation 1,091 1,120 1,153 1,193 1,194 1,259 1,265 1,288 4,558 5,005
PBT after EO Exp 3,034 3,298 3,009 2,808 3,222 3,849 3,599 3,990 12,151 14,660
Effective Tax Rate (%) 25.4 25.3 25.8 26.0 24.9 25.4 25.0 24.7 25.6 25.0
Adj. PAT 2,263 2,462 2,232 2,078 2,419 2,870 2,699 3,007 9,036 10,995
Change (%) 80.5 5.1 9.4 -24.7 6.9 16.6 20.9 44.7 7.5 21.7

January 2024 51
 December 2023 Results Preview | Sector: Automobiles

Hero MotoCorp Buy

CMP: INR4,116 | TP: INR4,590 (+12%) EPS CHANGE (%): FY24|25E: -1 |1
 Volumes grew ~18% YoY due to healthy recovery in the  Margin would see a 20bp QoQ contraction (+240bp
domestic market, while discounts during the festival season YoY) due to slightly higher RM costs offset by lower
restricted realizations growth to 2% YoY. other expenses on LEAP savings.

Quarterly Performance (S/A) (INR m)

Y/E March FY23 FY24E FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
Total Volumes ('000 nos) 1,390 1,428 1,240 1,270 1,353 1,417 1,460 1,376 5,329 5,605
Growth YoY (%) 35.7 -0.7 -4.1 6.9 -2.7 -0.8 17.8 8.3 7.8 5.2
Net Realization 60,370 63,545 64,782 65,382 64,819 66,680 66,013 66,911 63,443 66,114
Growth YoY (%) 12.7 8.1 6.2 4.7 7.4 4.9 1.9 2.3 7.3 4.2
Net Op Revenues 83,925 90,754 80,310 83,068 87,673 94,454 96,375 92,091 3,38,057 3,70,593
Growth YoY (%) 53.0 7.4 1.9 11.9 4.5 4.1 20.0 10.9 15.6 9.6
RM Cost (% sales) 72.8 72.0 69.4 68.0 69.4 68.6 68.8 68.9 70.6 68.9
Staff Cost (% sales) 6.4 6.0 6.8 6.7 6.6 6.1 6.2 6.4 6.5 6.3
Other Exp (% sales) 9.6 10.6 12.3 12.3 10.3 11.2 11.1 11.2 11.2 11.0
EBITDA 9,408 10,383 9,241 10,830 12,063 13,283 13,421 12,503 39,862 51,270
EBITDA Margins (%) 11.2 11.4 11.5 13.0 13.8 14.1 13.9 13.6 11.8 13.8
Other Income 530 921 1,832 2,369 2,222 2,483 2,200 2,135 5,652 9,040
Interest 70 33 49 47 47 48 50 56 199 200
Depreciation 1,630 1,634 1,620 1,686 1,690 1,749 1,770 1,812 6,570 7,020
PBT before EO Exp/(Inc) 8,238 9,637 9,404 11,467 12,548 13,970 13,801 12,771 38,746 53,090
Effective Tax Rate (%) 24.2 25.7 24.4 25.1 24.7 24.6 24.7 24.8 24.9 24.7
Adj. PAT 6,245 7,161 7,111 8,589 9,452 10,538 10,392 9,606 29,106 39,989
Growth (%) 70.9 -9.9 3.6 37.0 51.4 47.2 46.2 11.8 17.7 37.4

MRF Sell
CMP: INR1,29,439 | TP: INR1,04,185 (-20%) EPS CHANGE (%): FY24|25E: 1 |2
 Expect revenue growth on a low base with stable demand  EBITDA margin is expected to contract 20bp sequentially led
from both OEM and replacements. by a slight uptick in RM costs.
Standalone - Quarterly Earning Model (INR m)
Y/E March FY23 FY24E FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
Net Sales 55,989 57,190 55,349 57,254 63,233 60,876 61,438 63,109 2,25,782 2,48,655
YoY Change (%) 35.6 18.4 14.6 10.1 12.9 6.4 11.0 10.2 18.9 10.1
Total Expenditure 51,207 52,517 49,863 48,823 52,091 49,589 50,230 52,600 2,02,409 2,04,509
EBITDA 4,783 4,673 5,486 8,431 11,142 11,286 11,208 10,509 23,373 44,145
Margins (%) 8.5 8.2 9.9 14.7 17.6 18.5 18.2 16.7 10.4 17.8
Depreciation 2,969 3,083 3,149 3,285 3,317 3,500 3,650 3,741 12,486 14,208
Interest 635 704 802 839 780 749 760 763 2,981 3,052
Other Income 341 764 700 678 739 696 650 647 2,482 2,732
PBT before EO expense 1,519 1,650 2,235 4,985 7,783 7,734 7,448 6,652 10,389 29,617
Extra-Ord expense 0 0 0 -803 0 0 0 0 -803 0
PBT 1,519 1,650 2,235 5,788 7,783 7,734 7,448 6,652 11,192 29,617
Tax 395 410 543 1,682 1,969 2,015 1,892 1,676 3,030 7,552
Rate (%) 26.0 24.9 24.3 29.1 25.3 26.1 25.4 25.2 27.1 25.5
Reported PAT 1,123 1,240 1,692 4,106 5,814 5,719 5,556 4,975 8,162 22,065
Adj PAT 1,123 1,240 1,692 3,537 5,814 5,719 5,556 4,975 7,576 22,065
YoY Change (%) -30.4 -32.4 16.0 125.6 417.6 361.3 228.4 40.7 17.0 191.2
Margins (%) 2.0 2.2 3.1 6.2 9.2 9.4 9.0 7.9 3.4 8.9
E: MOFSL Estimates

January 2024 52
 December 2023 Results Preview | Sector: Automobiles

Mahindra & Mahindra Buy

CMP: INR1,704 | TP: INR2,005 (+18%) EPS CHANGE (%): FY24|25E: -1|-1
 Strong volume growth in autos (improving supply  A sequential improvement of ~10bp in EBITDA margin,
chain); but tractors declined on a high base of last year despite a weaker mix, to be largely led by operating
and uneven rainfall. leverage. PBIT margin is likely to contract 70bp QoQ to 8.3%
for autos due to lower volumes sequentially, while FES’
margin is likely to improve 40bp QoQ to 16.4% due to higher
volumes QoQ.
Quarterly Performance (INR m)
Y/E March FY23 FY24E FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
Total Volumes (nos) 2,71,971 2,73,223 2,81,859 2,78,948 3,01,147 3,02,139 3,13,115 3,21,982 11,05,375 12,38,383
Growth YoY (%) 45.6 43.3 31.6 21.9 10.7 10.6 11.1 15.4 34.8 12.0
Net Realization 7,25,262 7,68,974 7,68,247 8,09,160 7,98,814 8,04,593 8,14,403 8,30,178 7,68,610 8,12,320
Growth YoY (%) 15.2 10.2 7.2 7.4 10.1 4.6 6.0 2.6 9.1 5.7
Revenue from Operations 1,97,250 2,10,101 2,16,537 2,25,714 2,40,561 2,43,099 2,55,002 2,67,303 8,49,603 10,05,964
Growth YoY (%) 67.7 57.9 41.1 30.9 22.0 15.7 17.8 18.4 47.0 18.4
RM Cost (% of sales) 76.6 76.5 76.0 75.0 75.3 75.6 75.7 75.8 76.0 75.6
Staff (% of sales) 4.3 4.4 4.2 4.2 4.3 4.8 4.7 4.5 4.3 4.5
Oth. Exp. (% of Sales) 7.3 7.2 6.7 8.4 6.9 7.2 6.9 7.2 7.4 7.0
EBITDA 23,335 24,973 28,142 27,974 32,351 30,660 32,426 33,680 1,04,424 1,29,117
EBITDA Margins (%) 11.8 11.9 13.0 12.4 13.4 12.6 12.7 12.6 12.3 12.8
Other income (incl Inc. from Invest) 2,279 13,134 6,700 3,339 9,699 21,500 6,500 3,194 25,452 40,893
Interest 703 641 686 698 323 329 345 379 2,728 1,377
Depreciation 6,955 7,913 8,292 8,385 8,281 8,158 8,300 8,340 31,545 33,080
EBIT 16,381 17,060 19,850 19,589 24,070 22,502 24,126 25,340 72,879 96,037
EO Income/(Exp) -410 -2,479 -6,289 -5,118 0 0 0 0 -14,295 0
PBT after EO 17,547 27,074 19,576 17,111 33,445 43,672 30,281 28,154 81,308 1,35,553
Tax 3,511 6,394 4,296 1,621 5,708 9,153 6,965 6,640 15,821 28,466
Effective Tax Rate (%) 20.0 23.6 21.9 9.5 17.1 21.0 23.0 23.6 19.5 21.0
Reported PAT 14,036 20,680 15,281 15,490 27,737 34,519 23,316 21,514 65,486 1,07,087
Adj PAT 14,040 23,380 20,290 19,750 27,737 34,519 23,316 21,514 77,700 1,07,087
Change (%) 50.3 38.6 52.0 66.7 97.6 47.6 14.9 8.9 51.8 37.8

Maruti Suzuki Buy

CMP: INR10,282 | TP: INR12,055 (+17%) EPS CHANGE (%): FY24|25E: -2|-2
 Volume growth of 8% YoY was driven by visible traction in  EBITDA margin likely to contract 70bp QoQ to 12.2%, due
UVs (60% YoY growth), while entry-level models declined to uptick in RM costs coupled with operating deleverage
48% YoY.  We have slightly tweaked our FY24E/FY25E volumes to
account for the weakness in the entry-level segment.
S/A Quarterly Performance (INR m)
Y/E March FY23 FY24E FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
Volumes ('000 units) 467.9 517.4 465.9 514.9 498.0 552.2 501.2 583.4 1,966.2 2,134.9
Change (%) 32.3 36.3 8.2 5.4 6.4 6.7 7.6 13.3 19.0 8.6
Realizations (INR/car) 5,66,319 5,78,490 6,23,387 6,22,379 6,49,095 6,71,178 6,67,822 6,92,313 5,97,727 6,71,014
Change (%) 12.7 6.9 15.5 13.7 14.6 16.0 7.1 11.2 11.9 12.3
Net operating revenues 2,64,998 2,99,308 2,90,443 3,20,480 3,23,269 3,70,621 3,34,717 4,03,920 11,75,229 14,32,527
Change (%) 49.1 45.7 24.9 19.9 22.0 23.8 15.2 26.0 33.1 21.9
RM Cost (% of sales) 74.6 73.1 72.7 73.3 72.8 70.6 70.9 71.0 73.4 71.3
Staff Cost (% of sales) 4.4 3.8 4.1 3.5 4.5 3.5 3.9 3.3 3.9 3.8
Other Cost (% of sales) 13.8 13.9 13.4 12.8 13.5 12.9 13.0 12.6 13.3 13.0
EBITDA 19,121 27,689 28,331 33,503 29,830 47,842 40,678 52,602 1,10,077 1,70,952
EBITDA Margins (%) 7.2 9.3 9.8 10.5 9.2 12.9 12.2 13.0 9.4 11.9
Depreciation 6,514 7,226 7,101 7,392 7,475 7,941 8,000 8,120 28,233 31,536
EBIT 12,607 20,463 21,230 26,111 22,355 39,901 32,678 44,482 81,844 1,39,416
EBIT Margins (%) 4.8 6.8 7.3 8.1 6.9 10.8 9.8 11.0 7.0 9.7
Interest 274 305 296 991 465 351 410 424 1,866 1,650
Non-Operating Income 885 6,125 8,608 7,428 10,012 8,436 7,500 7,697 21,613 33,645
PBT 13,218 26,283 29,542 32,548 31,902 47,986 39,768 51,754 1,01,591 1,71,411
Effective Tax Rate (%) 23.4 21.6 20.4 19.4 22.1 22.6 22.8 23.0 20.8 22.7
Adjusted PAT 10,128 20,615 23,513 26,236 24,851 37,165 30,721 39,846 80,492 1,32,583

January 2024 53
 December 2023 Results Preview | Sector: Automobiles

Motherson Wiring India Buy

CMP: INR62| TP: INR70 (+14%) EPS CHANGE (%): FY24|25E: 1|1
 Healthy YoY growth driven by: 1) traction for new models  EBITDA margin would expand as there would be pass
and premium category in PVs, and 2) stability in CV through of RM costs with customers operating with a
demand. quarter lag and ramp-up of new models where there is a
potential of increased efficiencies.
Quarterly performance (INR m)
Y/E March FY23 FY24E FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
Net Sales 16,709 18,352 16,868 18,644 18,588 21,046 20,415 21,817 70,574 81,866
YoY Change (%) 50.0 31.1 15.6 12.2 11.2 14.7 21.0 17.0 25.2 16.0
RM Cost (% of sales) 64.9 66.2 64.3 66.9 65.7 66.2 65.0 65.2 65.6 65.5
Staff Cost (% of sales) 16.4 17.3 17.8 15.6 17.6 16.3 16.6 16.1 16.8 16.6
Other Expenses (% of sales) 6.6 6.6 7.3 6.2 6.3 5.7 5.9 5.9 6.5 5.9
EBITDA 2,028 1,808 1,790 2,093 1,941 2,481 2,551 2,802 7,814 9,775
Margins (%) 12.1 9.9 10.6 11.2 10.4 11.8 12.5 12.8 11.1 11.9
Depreciation 277 295 317 348 338 364 360 375 1,237 1,437
Interest 69 59 65 86 77 74 75 74 278 300
Other Income 77 107 7 127 136 56 70 60 223 321
PBT before EO expense 1,759 1,562 1,415 1,786 1,661 2,100 2,186 2,413 6,522 8,359
PBT after EO Expense 1,759 1,562 1,415 1,786 1,661 2,100 2,186 2,413 6,522 8,359
Tax Rate (%) 28 25 25 22 26 26 26 25 25 26
Reported PAT 1,260 1,165 1,062 1,385 1,231 1,559 1,628 1,801 4,871 6,219
Adj PAT 1,260 1,165 1,062 1,385 1,231 1,559 1,628 1,801 4,871 6,219
YoY Change (%) 106.5 2.1 -19.6 -13.2 -2.2 33.9 53.4 30.1 4.3 27.7
E: MOFSL Estimates

Samvardhana Motherson Sumi Buy

CMP: INR106| TP: INR120 (+13%) EPS CHANGE (%): FY24|25E: -1|4
 Execution of healthy order book combined with  EBITDA margin is expected to see 130bp QoQ expansion
contribution from recent acquisitions is expected to drive to 9.3% mainly due to operating leverage benefits.
revenue growth of 25% YoY.  FY25E EPS upgrade to factor in global PV recovery.
Consolidated – Quarterly performance (INR m)
Y/E March FY23 FY24E FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
Net Sales 1,76,545 1,82,608 2,02,672 2,24,769 2,24,622 2,34,738 2,53,565 2,58,883 7,87,007 9,71,808
YoY Change (%) 7.6 26.7 23.3 31.0 27.2 28.5 25.1 15.2 22.2 23.5
EBITDA 11,166 14,031 16,163 20,205 19,246 18,888 23,531 25,766 62,077 87,431
Margins (%) 6.3 7.7 8.0 9.0 8.6 8.0 9.3 10.0 7.9 9.0
Depreciation 7,324 7,487 8,150 8,397 8,389 8,674 8,850 9,046 31,358 34,958
Interest 1,694 1,837 1,494 2,784 2,526 4,879 3,250 3,177 7,809 13,833
Other income 581 940 811 751 529 1,654 1,000 617 2,570 3,800
PBT after EO Expense 2,729 4,663 7,320 9,773 8,860 4,495 12,431 14,161 24,485 39,946
Tax Rate (%) 34.0 30.3 29.6 26.0 29.5 32.8 30.0 29.3 28.9 30.1
Min. Int & Share of profit 389 485 609 695 241 188 106 88 2,178 623
Reported PAT 1,412 2,464 4,539 6,540 6,009 2,015 8,595 9,921 14,956 26,541
Adj PAT 1,412 3,153 4,546 6,540 6,009 4,509 8,595 9,921 15,652 29,035
YoY Change (%) -55.1 123.6 100.3 362.1 325.5 43.0 89.1 51.7 90.0 85.5
E: MOFSL Estimates

January 2024 54
 December 2023 Results Preview | Sector: Automobiles

SONA BLW Neutral

CMP: INR645| TP: INR595 (-8%) EPS CHANGE (%): FY24|25E: 1|0
 Revenue growth YoY was driven by execution, ramp-up of  Sequentially, EBITDA margin would decline 40bp to 27.8%
new orders and recovery in global PV production. due to operating deleverage despite benefits of lower RM
costs.
Consol. Quarterly Performance
Y/E March FY23 FY24E FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
Net operating revenues 5,892 6,574 6,850 7,440 7,322 7,908 7,818 9,266 26,756 32,314
Change (%) 17.7 12.2 38.6 35.3 24.3 20.3 14.1 24.5 25.6 20.8
EBITDA 1,425 1,657 1,862 2,014 2,034 2,233 2,173 2,636 6,958 9,076
EBITDA Margins (%) 24.2 25.2 27.2 27.1 27.8 28.2 27.8 28.4 26.0 28.1
Depreciation 400 429 470 481 511 534 540 591 1,780 2,176
EBIT 1,025 1,228 1,392 1,533 1,523 1,699 1,633 2,044 5,178 6,900
EBIT Margins (%) 17.4 18.7 20.3 20.6 20.8 21.5 20.9 22.1 19.4 21.4
Interest 29 43 51 46 53 60 50 47 169 210
Non-Operating Income 10 28 33 45 54 61 50 25 116 190
PBT 1,006 1,213 1,373 1,498 1,495 1,641 1,633 2,023 5,091 6,793
Effective Tax Rate (%) 24.6 23.7 22.0 20.0 25.1 24.4 23.0 23.7 22.4 24.0
Adjusted PAT 758 925 1,071 1,232 1,142 1,286 1,258 1,544 3,979 5,229
Change (%) 5.4 4.9 23.9 35.1 50.6 39.0 17.4 25.3 17.1 31.4

Tata Motors Buy

CMP: INR791 | TP: INR900 (+14%) EPS CHANGE (%): FY24|25E: -3|11
 India business performance was a mixed bag as CV  JLR volumes to grow YoY due to easing chip shortages and
volumes remained flat YoY while PVs saw a slight growth traction towards newer models. We estimate an EBIT
of 5% YoY. margin of 7.4% (+10bp QoQ) for JLR supported by
 CV’s EBIT margin is likely to contract 70bp QoQ to 6.5% improved mix, stable RM costs, and operating leverage.
due to lower volumes sequentially. However, PV’s EBIT  We raise our EPS for FY25E by 11% to factor in improved
margin is likely to see a slight improvement of 20bp to visibility in global PV demand.
1.9% due to stable volumes and better cost-control
measures.
Consol. Quarterly Performance (INR b)
INR b FY23 FY24 FY23 FY24
1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
JLR Volumes (incl JV; '000 units) 82.6 89.9 92.3 107.4 106.3 109.1 113.3 126.9 372.2 455.6
JLR Realizations (GBP/unit) 61,352 69,847 75,901 75,035 74,024 70,824 73,657 72,541 70,976 72,750
JLR EBITDA Margins (%) 6.7 10.3 11.9 14.8 16.3 14.9 15.1 16.4 11.3 15.7
India CV Volumes ('000 units) 103.7 100.5 95.0 118.7 88.6 106.8 97.3 119.1 417.9 411.8
India CV Realizations (INR '000/unit) 1575.7 1642.6 1784.5 1798.4 1925.4 1887.2 1909.4 1983.6 1721.9 1928.5
India CV EBITDA Margins (%) 5.4 5.1 8.5 10.2 9.4 10.4 9.4 11.8 7.5 7.5
India PV Volumes ('000 units) 130.4 142.8 132.3 135.5 140.4 139.0 138.4 147.4 541.0 565.2
India PV Realizations (INR '000/unit) 894.6 885.7 893.0 898.2 921.8 880.9 916.2 922.8 892.8 910.6
India PV EBITDA Margins (%) 6.2 5.7 7.0 7.3 5.2 6.4 7.0 8.2 6.5 6.5
Net Consol. Op Income 719.3 796.1 884.9 1059.3 1022.4 1051.3 1073.9 1190.8 3459.7 4338.4
Growth (%) 8.3 29.7 22.5 35.1 42.1 32.1 21.4 12.4 24.2 25.4
Consol. EBITDA 31.8 62.0 96.4 128.1 135.6 137.2 137.6 171.4 318.3 581.8
EBITDA Margins (%) 4.4 7.8 10.9 12.1 13.3 13.1 12.8 14.4 9.2 13.4
Depreciation 58.4 59.0 60.7 70.5 66.3 66.4 70.0 78.7 248.6 281.4
Other Income 8.9 10.4 11.3 15.8 13.6 16.3 13.0 14.0 46.3 57.0
Interest Expenses 24.2 24.9 26.8 26.6 26.2 27.0 27.0 27.4 102.4 107.6
PBT before EO -49.6 -17.7 32.0 50.0 53.3 61.1 48.6 74.5 14.7 237.4
EO Exp/(Inc) -14.9 -3.1 0.0 2.2 6.8 1.2 0.0 0.0 -15.91 8.01
PBT after EO Exp -34.7 -14.6 32.0 47.8 46.5 59.9 48.6 74.5 30.6 229.4
Tax rate (%) -43.8 31.3 8.2 -13.0 33.6 36.8 27.0 27.4 23.0 31.0
PAT -49.9 -10.0 29.4 54.0 30.9 37.8 35.5 54.0 23.5 158.2
Minority Interest -0.6 -0.5 -0.9 -0.9 -1.0 -0.7 -0.8 -0.9 -2.8 -3.4
Share in profit of Associate 0.4 1.1 1.0 0.9 2.1 0.5 0.4 2.0 3.4 5.0
Reported PAT -50.1 -9.4 29.6 54.1 32.0 37.6 35.1 55.1 24.1 159.8
Adj PAT -65.0 -12.6 29.6 56.2 37.2 38.6 35.1 55.1 8.2 165.4
Growth (%) 46.0 -71.7 -284.6 -1862.6 -157.3 -407.0 18.6 -2.0 -107.6 1907.3

January 2024 55
 December 2023 Results Preview | Sector: Automobiles

Tube Investments Buy

CMP: INR3,576 | TP: INR3,945 (+10%) EPS CHANGE (%): FY24|25E: 0|3
 Sequential recovery in 2W business, along with exports, to  EBIT margin for the mobility business is likely to expand to
drive QoQ growth in engineering business. The company 1.2% (vs. -1.7% in 2QFY24); engineering business/metal-
has also been gaining market share from peers. formed business/other business margins likely to see a
 Metal-formed business to see 12% YoY growth led by slight decline of 30bp/20bp/20bp QoQ to 13%/13.2%/
tenders from railways and expected new order wins. 8.2%.
Quarterly performance (S/A) (INR m)
Y/E March FY23 FY24E FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
Net Sales 19,570 19,059 17,097 16,634 17,801 19,696 20,402 20,956 72,360 78,855
YoY Change (%) 55.7 14.4 0.5 -4.1 -9.0 3.3 19.3 26.0 13.8 9.0
EBITDA 2,040 2,512 2,144 2,106 2,160 2,514 2,696 2,983 8,803 10,353
Margins (%) 10.4 13.2 12.5 12.7 12.1 12.8 13.2 14.2 12.2 13.1
Depreciation 325 346 337 448 331 346 360 475 1,456 1,511
Interest 36 52 60 68 70 77 70 62 216 279
Other Income 120 145 171 1,717 219 358 250 1,844 2,152 2,671
PBT before EO expense 1,800 2,258 1,919 3,306 1,979 2,448 2,516 4,290 9,283 11,233
Tax 457 599 542 507 502 634 634 1,082 2,104 2,852
Tax Rate (%) 25.4 29.6 28.2 16.8 25.4 25.9 25.2 25.2 24.0 25.4
Adj PAT 1,343 1,603 1,377 2,729 1,477 1,814 1,882 3,208 7,053 8,382
YoY Change (%) 38.5 32.0 14.3 100.2 10.0 13.2 36.7 17.5 46.7 18.8

TVS Motor Company Neutral

CMP: INR2,019 | TP: INR1,780 (-12%) EPS CHANGE (%): FY24|25E: -3|3
 In 3QFY24, domestic 2W volumes witnessed a sharp  We have raised our multiple to 25x from 22x to factor in
growth (+34% YoY), while exports showed a slight the growth in EVs and better product development.
improvement of 4% YoY on a low base.  We have tweaked our FY24 estimates a bit to account for
 Sequential EBITDA margin expansion of 50bp to be aided slightly lower volumes.
by benefits of operating leverage despite a slight uptick in
RM costs.
S/A Quarterly Performance
Y/E March (INR m) FY23 FY24 FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
Vols ('000 units) 906.8 1,027.4 879.4 866.5 953.2 1,074.4 1,100.8 1,090.7 3,680 4,219
Growth (%) 37.9 12.1 0.1 1.2 5.1 4.6 25.2 25.9 11.2 14.6
Realn (INR '000/unit) 66.3 70.3 74.4 76.2 75.7 75.8 75.0 75.9 71.7 75.6
Growth (%) 10.8 15.1 14.6 18.0 14.3 7.9 0.8 (0.4) 14.2 5.5
Net Sales 60,087 72,192 65,454 66,048 72,179 81,446 82,618 82,807 2,63,781 3,19,050
Growth (%) 52.7 29.0 14.7 19.4 20.1 12.8 26.2 25.4 27.0 21.0
RM (% of sales) 76.1 76.2 75.5 75.4 74.6 74.0 74.1 74.0 75.8 74.2
Emp cost ( % of sales) 5.3 4.8 5.2 5.1 5.2 4.8 4.7 4.8 5.1 4.9
Other exp (% of sales) 8.6 8.9 9.2 9.2 9.6 10.1 9.7 9.8 9.0 9.8
EBITDA 5,995 7,365 6,589 6,798 7,638 8,998 9,464 9,475 26,747 35,574
EBITDA Margin(%) 10.0 10.2 10.1 10.3 10.6 11.0 11.5 11.4 10.1 11.2
Interest 376 352 316 363 474 523 500 467 1,407 1,964
Depreciation 1,520 1,535 1,583 1,674 1,636 1,701 1,730 1,775 6,312 6,841
Other Income 222 14 65 88 576 462 60 53 389 1,151
PBT before EO Exp 4,321 5,492 4,755 4,849 6,104 7,237 7,294 7,285 19,417 27,919
EO Exp 0 0 0 -617 0 0 0 0 -617
PBT after EO Exp 4,321 5,492 4,755 5,466 6,104 7,237 7,294 7,285 20,034 27,919
Tax rate (%) 25.8 25.8 25.8 24.9 23.4 25.9 25.0 24.7 25.6 24.8
Reported PAT 3,205 4,075 3,528 4,103 4,677 5,366 5,470 5,483 14,910 20,995
Adjusted PAT 3,205 4,075 3,527 3,640 4,677 5,366 5,470 5,483 14,451 20,995
Growth (%) 325.3 56.1 22.4 32.6 45.9 31.7 55.1 50.6 60.7 45.3

January 2024 56
 December 2023 Results Preview | Sector: Capital Goods

Capital Goods
Company Order inflow momentum continued during 3QFY24
ABB India  With the government’s continued thrust on capex-led growth, ordering activities
Bharat Electronics during 9MFY24 for the capital goods sector have been robust across key verticals of
Cummins India renewable energy, power T&D, defense, railways, metro, water, etc. On the private
Hitachi Energy India side, investments have been taking place selectively across data centers, real estate,
Kalpataru Projects International cement, metals & mining, industrial automation, PLI-led capex, et al.
KEC International  We expect strong order books of the companies to provide healthy visibility on
Kirloskar Oil Engines revenues. We expect 17% YoY execution growth for 3QFY24. Supply chain issues that
L&T had impacted previous quarters adversely may continue to impact execution over the
Siemens next 1-2 quarters.
 While we expect EPC companies such as L&T, KEC, and Kalpataru Projects to witness a
Thermax
gradual improvement in margins due to near-completion of the low-margin legacy
Triveni Turbine
projects, we expect product companies to pass on the lower RM price benefits to the
end-users. As a result, we expect a ~20bp YoY EBITDA margin expansion for our
coverage universe.
 We estimate our coverage universe to report: 1) a revenue growth of 17% YoY, 2) an
EBITDA growth of 20% YoY, and 3) a PAT growth of 30% YoY in 3QFY24.
Ordering momentum continued in 3QFY24
Ordering momentum has remained quite strong for the capital goods companies
during the current fiscal so far. Inflow momentum continued in 3QFY24 across
segments, with players announcing healthy order wins during the quarter, such as
L&T winning ~INR435b, Bharat Electronics winning ~INR84b, KEC securing ~INR39b,
KPIL acquiring ~INR77b, and Thermax achieving ~INR5b. These orders are diversified
across hydrocarbon, transmission, defense, civil, B&F, and metro segments. Along
with this, the finalization of tenders was also seen for thermal power projects,
railway wagons, transmission, and defense during the quarter. On the private side,
investments have been taking place selectively across areas such as data centers,
real estate, cement, metals & mining, industrial automation, and PLI-led capex. We
expect strong order books of companies to provide a healthy visibility on revenues.
We anticipate an execution growth of 17% YoY for 3QFY24.

Margin trajectory to be mixed for 3QFY24

While we expect EPC companies such as L&T, KEC, and Kalpataru Projects to witness
a gradual improvement in margins due to near-completion of the low-margin legacy
projects, we expect product companies to pass on the lower RM price benefits to
the end-users. L&T had given an EBITDA margin guidance of 8.5-9.0% for the full
year on its core E&C segment, implying a margin improvement in 2HFY24. KEC had
given an EBITDA margin guidance of 6.75-7.0% during 2HFY24 on near-completion
of the legacy projects and lower RM prices. We anticipate Cummins and KOEL to
start witnessing a normalization of dealer inventory that had built up during 1HFY24
due to the expected implementation of CPCB 4+ norms. However, certain supply-
side issues related to electronic components may defer revenues to some extent
during 3QFY24 and hence can hurt margins too. Lower-than-expected export
revenues for both Cummins and KOEL can impact their margins adversely. We
expect margins to moderate QoQ for ABB and Siemens, as the previous quarter had
the benefits of higher prices and lower-cost RM inventory.

Teena Virmani - Research Analyst (Teena.Virmani@MotilalOswal.com)

January
Harsh 2023 - Research Analyst (Harsh.Tewaney@MotilalOswal.com)
Tewaney 57
 December 2023 Results Preview | Sector: Capital Goods

Export trend to be weak in the near term

Barring GCC countries, export activity has been rather muted in the past few months
as developed economies grapple with inflation, an economic slowdown, and
tightening monetary policy. This can have an adverse impact on the export revenues
of Cummins, ABB, and Siemens. However, the silver lining comes from a much
stronger demand growth in the domestic markets. This is also reflected in the
announcements of capex plans from key players such as CG Power, Siemens, etc.
during the last quarter to capitalize on domestic market growth.

Election schedule can have a near-term impact on inflows and working capital
We expect the election schedule to have an impact on inflows and working capital
during 4QFY24-1QFY25 for companies focused on government capex, particularly on
the EPC and defense areas. With the up-fronting of inflows as well as the
geographical diversification seen for most of the EPC and defense players such as
L&T and BEL, we expect companies to focus on execution. Post- 1QFY25, we expect
inflows and working capital to start getting normalized.

We remain positive on long-term growth for the capital goods sector

We believe that there are enough levers in place for companies to benefit from the
upcoming opportunities across various segments over the long term, despite near-
term disruption due to the elections. We do expect some moderation in the near-
term ordering activity from the government. However, private sector capex is
gradually showing signs of pick up, particularly from auto, cement, metals as well as
the PLI-led capex. The players’ order books are already quite healthy, which provide
visibility for a healthy revenue CAGR. Strong demand and RM tailwinds are positive
catalysts, some of which will have to be passed on by the companies. Near-term
weakness in exports may weigh on revenue and margins of the companies.
However, higher oil prices and incremental spending from GCC nations are positives
for EPC companies, which have a presence in the MENA region.

Our top picks

Our top picks from the sector continue to be ABB, L&T and Kirloskar Oil Engines. We
expect ABB and Siemens to be the beneficiaries of an improved addressable market
from short-cycle orders from the private sector as well as transmission, railways,
data center, and PLI-led spending. We expect L&T to continue to benefit from both
domestic and international spending as well as control over its working capital. We
like KOEL because of its attractive valuations which has further scope of re-rating
from current levels.

January 2024 58
 December 2023 Results Preview | Sector: Capital Goods

Exhibit 1: Expected quarterly performance summary

SALES (INR M) EBDITA (INR M) NET PROFIT (INR M)
CMP
RECO Var Var Var Var Var Var
Sector (INR) Dec-23 Dec-23 Dec-23
% YoY % QoQ % YoY % QoQ % YoY % QoQ
ABB India 4679 Buy 31,866 31.3 15.1 3,518 -3.4 -19.8 2,992 -2.0 -17.3
Bharat Electronics 185 Neutral 51,378 24.4 28.7 11,560 35.4 15.1 7,907 32.1 -2.7
Cummins India 1955 Buy 22,048 1.1 16.1 3,391 -17.7 0.1 3,108 -13.7 -5.4
Hitachi Energy 5460 Sell 13,361 29.2 8.8 930 135.8 42.4 456 895.3 84.3
KEC International 606 Neutral 52,631 20.3 17.0 3,526 76.4 28.6 1,143 548.5 104.9
Kalpataru Proj. 716 Buy 42,554 21.3 10.7 3,447 13.0 11.9 1,326 19.5 17.4
Kirloskar Oil 663 Buy 11,529 15.3 8.9 1,257 15.4 27.4 820 20.3 40.0
Larsen & Toubro 3522 Buy 5,38,430 16.1 5.5 61,996 22.2 10.1 34,696 41.2 7.7
Siemens 4025 Buy 56,996 17.0 1.8 7,322 29.3 2.2 5,787 27.0 2.1
Thermax 3087 Neutral 23,740 15.8 3.1 2,035 26.3 -0.6 1,450 14.5 -8.7
Triveni Turbine 420 Buy 4,259 30.7 9.8 827 31.0 11.2 660 25.4 3.0
Capital Goods 8,48,791 17.4 8.0 99,809 22.5 9.0 60,346 32.4 4.6

Exhibit 2: Comparative valuations

CMP EPS (INR) PE (x) PB (x) ROE (%)
Company Name INR Reco
FY24E FY25E FY26E FY24E FY25E FY26E FY24E FY25E FY26E FY24E FY25E FY26E
Capital Goods 43.4 35.1 29.0 6.9 6.0 5.3 15.8 17.2 18.1
ABB India 4,679 Buy 56.7 68.8 81.8 82.5 68.0 57.2 16.4 13.5 11.1 21.9 21.7 21.3
Bharat Electronics 185 Neutral 4.7 5.3 6.0 39.3 35.1 30.7 8.6 7.5 6.6 22.0 21.5 21.5
Cummins India 1,955 Buy 45.5 54.4 64.1 43.0 35.9 30.5 9.2 8.3 7.5 22.4 24.4 25.9
Hitachi Energy 5,460 Sell 28.4 74.5 109.4 192.4 73.3 49.9 17.3 14.0 10.9 9.0 19.1 21.9
Kalpataru Proj. 716 Buy 36.3 55.8 65.8 19.7 12.8 10.9 2.0 1.7 1.5 10.6 14.4 14.8
KEC International 606 Neutral 16.9 30.0 43.6 35.9 20.2 13.9 3.7 3.2 2.7 10.9 17.1 21.0
Kirloskar Oil 663 Buy 23.9 29.9 36.9 27.7 22.2 17.9 3.7 3.3 2.9 14.1 15.8 17.3
Larsen & Toubro 3,522 Buy 97.6 120.9 146.9 36.1 29.1 24.0 5.4 4.8 4.2 15.0 17.5 18.7
Siemens 4,025 Buy 55.1 65.0 77.5 73.1 62.0 51.9 11.0 9.7 8.5 15.9 16.6 17.5
Thermax 3,087 Neutral 50.6 61.0 72.1 61.0 50.6 42.8 8.2 7.3 6.4 14.0 15.2 15.9
Triveni Turbine 420 Buy 7.9 10.6 14.0 53.1 39.5 30.0 14.2 11.3 8.9 29.6 31.8 33.1

Exhibit 3: Relative performance – three-months (%) Exhibit 4: Relative performance – one-year (%)
Nifty Index MOFSL Capital Goods Index Nifty Index MOFSL Capital Goods Index
118 180

112 155

106 130

100 105
94
80
Nov-23
Sep-23

Oct-23

Dec-23

Dec-22

Mar-23

Jun-23

Sep-23

Dec-23

Source: Bloomberg, MOFSL Source: Bloomberg, MOFSL

Exhibit 5: EBITDA margin snapshot for EPC companies under our coverage

Aggregate EPC EBITDA margin (%)

11.9
11.1 10.7 10.9 10.5 10.9
10.4 10.3 9.7

3QFY22 4QFY22 1QFY23 2QFY23 3QFY23 4QFY23 1QFY24 2QFY24 3QFY24E

Source: Company, MOFSL

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Exhibit 6: Gross margin snapshot for product companies under our coverage

Aggregate gross margin (%)

40.1
38.9
38.0
37.3 37.0 36.8 36.9
36.1
33.9

3QFY22 4QFY22 1QFY23 2QFY23 3QFY23 4QFY23 1QFY24 2QFY24 3QFY24E

Source: Company, MOFSL

Exhibit 7: EBITDA margin snapshot for product companies under our coverage

Aggregate product EBITDA margin (%)

16.9
15.5 15.1 15.2 15.0 14.3
12.9 12.3 13.0

3QFY22 4QFY22 1QFY23 2QFY23 3QFY23 4QFY23 1QFY24 2QFY24 3QFY24E

Source: Company, MOFSL

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The tables below provide a snapshot of actual and estimated numbers for companies under the MOFSL coverage
universe. Highlighted columns indicate the quarter/financial year under review.

ABB India Buy

CMP: INR4,679 | TP: INR5,460 (+17%) EPS CHANGE (%): CY24|25: +1|+1
 Expect revenue to grow 31% YoY driven by strong order  We expect moderation in margins as we anticipate the
book. company to pass on RM price corrections to end-users.
 Watch out for incremental inflows from transmission,  Sustainability of inflows as well as margins, outlook on
railways, data center as well as private capex for exports and localization levels would be the key
improvement in inflows from the current levels. monitorables.
Standalone - Quarterly Snapshot (INR m)
Y/E December CY22 CY23 CY23E CY24E
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4QE
Net Sales 19,684 20,525 21,197 24,269 24,112 25,086 27,692 31,866 1,08,756 1,34,701
YoY Change (%) 20.8 44.0 19.2 15.5 22.5 22.2 30.6 31.3 26.9 23.9
Total Expenditure 17,805 18,538 19,088 20,626 21,259 21,599 23,307 28,347 94,513 1,16,947
EBITDA 1,879 1,988 2,110 3,643 2,853 3,487 4,385 3,518 14,243 17,754
Margins (%) 9.5 9.7 10.0 15.0 11.8 13.9 15.8 11.0 13.1 13.2
Depreciation 257 253 269 268 274 292 303 272 1,142 1,275
Interest 15 28 16 72 22 14 9 67 112 113
Other Income 3,335 186 780 694 723 750 768 842 3,083 3,112
PBT before EO expense 4,943 1,891 2,605 3,996 3,279 3,931 4,842 4,022 16,074 19,478
PBT 4,943 1,891 2,605 3,996 3,279 3,931 4,842 4,022 16,074 19,478
Tax 1,212 489 638 943 827 972 1,222 1,030 4,051 4,909
Rate (%) 24.5 25.8 24.5 23.6 25.2 24.7 25.2 25.6 25.2 25.2
Reported PAT 3,731 1,403 1,968 3,053 2,452 2,959 3,620 2,992 12,023 14,570
Adj PAT 3,731 1,403 1,968 3,053 2,452 2,959 3,620 2,992 12,023 14,570
YoY Change (%) 164.0 99.7 64.1 62.2 -34.3 110.9 84.0 -2.0 72.9 21.2
Margins (%) 19.0 6.8 9.3 12.6 10.2 11.8 13.1 9.4 11.1 10.8

Bharat Electronics Neutral

CMP: INR185 | TP: INR180 (-3%)
 Expect revenue growth of 25% YoY led by better execution
of OB and strong inflows received so far in the current fiscal.
 Key monitorables: Further update on order inflows post-
elections, update on QRSAM/MRSAM, share of exports,
and working capital cycle are the key monitorables.
EPS CHANGE (%): FY24|25: -|+3
 We expect margins to expand ~180bp YoY to 22.5% (in-
line with guidance).
 We incorporate higher order inflows for FY24E based on
the company’s inflows so far in 9MFY24 and we revise our
TP accordingly.

Standalone - Quarterly Snapshot (INR m)

Y/E March FY23 FY24 FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
Net Sales 31,128 39,458 41,310 64,566 35,108 39,933 51,378 79,094 1,76,462 2,05,514
Change (%) 90.4 7.8 11.8 2.1 12.8 1.2 24.4 22.5 15.2 16.5
EBITDA 5,134 8,558 8,535 18,248 6,644 10,044 11,560 18,627 40,475 46,875
Change (%) 716.8 (0.1) 3.8 16.4 29.4 17.4 35.4 2.1 22.3 15.8
Margin (%) 16.5 21.7 20.7 28.3 18.9 25.2 22.5 23.6 22.9 22.8
Depreciation 941 1,042 1,008 1,088 1,013 1,004 1,276 1,276 4,079 4,570
Interest 10 17 97 23 11 15 61 61 148 148
Other Income 1,597 750 575 678 1,417 1,705 348 348 3,600 3,818
PBT 5,781 8,249 8,004 17,815 7,038 10,729 10,571 17,638 39,849 45,976
Tax 1,466 2,138 2,017 4,161 1,729 2,606 2,664 4,573 9,782 11,572
Effective Tax Rate (%) 25.4 25.9 25.2 23.4 24.6 24.3 25.2 25.9 24.5 25.2
Reported PAT 4,315 6,111 5,987 13,654 5,308 8,123 7,907 13,065 30,067 34,403
Change (%) 3,769.5 (0.2) 2.6 19.6 23.0 32.9 32.1 (4.3) 28.0 14.4
Adj PAT 4,315 6,111 5,987 13,654 5,308 8,123 7,907 13,065 30,067 34,403
Change (%) 3,769.5 (0.2) 2.6 19.6 23.0 32.9 32.1 (4.3) 28.0 14.4

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Cummins India Buy

CMP: INR1,955 | TP: INR2,250 (+15%) EPS CHANGE (%): FY24|25: -|-
 We expect largely flattish revenue growth YoY on a high  Expect EBITDA margin contraction of ~350bp YoY. Margins
base of 3QFY23. We expect normalization of inventory in 3QFY23 had the positive impact of lower RM prices as
stocking to benefit the powergen segment, while we well as higher product prices, which we expect to
anticipate exports to remain weak during 3QFY24. normalize in 3QFY24.
 Key monitorables – Demand outlook across segments –  Weakness in export markets continues to be a concern
particularly powergen for CPCB 4+ products and exports.
Standalone - Quarterly Snapshot (INR m)
Y/E March FY23 FY24E FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
Net Sales 16,867 19,513 21,805 19,260 22,087 18,997 22,048 22,351 77,444 85,483
YoY Change (%) 42.4 13.0 25.7 29.0 31.0 -2.6 1.1 16.0 26.1 12.3
Total Expenditure 14,728 16,607 17,683 16,000 18,681 15,611 18,657 18,886 65,018 71,830
EBITDA 2,138 2,905 4,122 3,261 3,406 3,386 3,391 3,464 12,426 13,652
Margins (%) 12.7 14.9 18.9 16.9 15.4 17.8 15.4 15.5 16.0 16.0
Depreciation 337 353 343 372 358 379 350 350 1,405 1,436
Interest 19 46 27 66 77 67 70 70 158 284
Other Income 1,001 855 1,038 1,306 1,175 1,322 1,121 1,121 4,200 4,740
PBT before EO expense 2,784 3,362 4,790 4,129 4,146 4,263 4,092 4,166 15,064 16,672
Extra-Ord expense 143 143
PBT 2,641 3,362 4,790 4,129 4,146 4,263 4,092 4,166 14,921 16,672
Tax 653 838 1,188 944 989 978 984 1,041 3,623 4,009
Rate (%) 24.7 24.9 24.8 22.9 23.9 22.9 24.0 25.0 24.3 24.0
Reported PAT 1,988 2,524 3,601 3,185 3,157 3,285 3,108 3,125 11,298 12,663
Adj PAT 2,096 2,524 3,601 3,185 3,157 3,285 3,108 3,125 11,406 12,663
YoY Change (%) 43.4 14.8 49.5 68.4 50.6 30.2 -13.7 -1.9 258.1 12.1
Margins (%) 12.4 12.9 16.5 16.5 14.3 17.3 14.1 14.0 14.7 14.8

Hitachi Energy India Sell

CMP: INR5,460 | TP: INR4,150 (-24%) EPS CHANGE (%): FY24|25: -|-
 We expect EBITDA margin to start improving from 3QFY24
 Expect revenue growth of 29% YoY at INR13.3b, driven by
on moderating supply chain issues as well as operating
easing of supply chain issues.
leverage gains.
 Key monitorables would be further ramp up in margins
 Near-term revenue momentum to be driven by ramp up
from the current levels, reduction in fees paid to ABB, and
of the Mumbai HVDC project.
HVDC and STATCOM order finalization.

Standalone - Quarterly Snapshot (INR m)

FY23 FY24 FY23 FY24E
Y/E March 1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
Net Sales 9,860 11,146 10,339 13,340 10,401 12,280 13,361 13,443 44,685 49,484
Change (%) 25.8 31.3 -7.9 19.8 5.5 10.2 29.2 0.8 NA 10.7
Gross profit
EBITDA 256 757 395 951 337 653 930 1,030 2,359 2,950
Change (%) -28.1 3.5 -36.1 43.5 31.3 -13.7 135.8 8.4 -24.1 25.0
Margins (%) 2.6 6.8 3.8 7.1 3.2 5.3 7.0 7.7 5.3 6.0
Depreciation 205 184 202 211 223 225 221 221 802 890
Interest 84 75 130 112 110 107 167 167 401 551
Other Income 53 4 71 23 29 2 68 68 151 168
PBT 21 502 134 651 34 324 609 709 1,308 1,676
Tax 8 131 88 143 10 76 154 233 369 473
Effective Tax Rate (%) 36.5 26.0 65.8 21.9 28.7 23.6 25.2 32.9 28.2 28.2
Extra-ordinary Items
Reported PAT 13 371 46 508 24 247 456 476 939 1,203
Change (%) -91.8 8.1 -92.6 -1.6 -44.0 79.9 -33.3 895.3 -6.4 -44.0
Adj PAT 13 371 46 508 24 247 456 476 939 1,203
Change (%) -91.8 8.1 -92.6 -1.6 79.9 -33.3 895.3 -6.4 -44.0 28.1

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Kalpataru Projects International Buy

CMP: INR716 | TP: INR820 (+14%)
 Expect revenue growth of 21% YoY led by execution of OB
 Key monitorables: Further uptick in transmission order
inflows, and outlook on urban infra and B&F division.
EPS CHANGE (%): FY24|25: -|-
 We expect EBITDA margin of 8.1% broadly in line with the
management’s guidance.
 We would also watch out for receivables from the railways
as well as overall working capital cycle.

Standalone - Quarterly Earning Model (INR m)

Y/E March FY23 FY24 FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
Net Sales 31,390 32,930 35,090 43,960 36,220 38,440 42,554 60,096 1,43,370 1,77,310
YoY Change (%) 15.4 16.7 21.3 36.7 15.6 23.7
Total Expenditure 28,700 30,170 32,040 40,850 33,080 35,360 39,108 55,176 1,31,760 1,62,724
EBITDA 2,690 2,760 3,050 3,110 3,140 3,080 3,447 4,919 11,610 14,586
Margins (%) 8.6 8.4 8.7 7.1 8.7 8.0 8.1 8.2 8.1 8.2
Depreciation 660 710 750 830 930 880 936 1,030 2,950 3,776
Interest 610 750 740 840 750 850 870 870 2,940 3,340
Other Income 660 150 90 220 290 250 254 254 1,120 1,048
PBT before EO expense 2,080 1,450 1,650 1,660 1,750 1,600 1,894 3,273 6,840 8,518
Extra-Ord expense 0 0 0 -540 0 0 0 0 540 0
PBT 2,080 1,450 1,650 2,200 1,750 1,600 1,894 3,273 6,300 8,518
Tax 440 410 540 680 490 470 568 1,049 2,070 2,578
Rate (%) 21.2 28.3 32.7 30.9 28.0 29.4 30.0 32.1 32.9 30.3
Reported PAT 1,640 1,040 1,110 1,520 1,260 1,130 1,326 2,224 4,230 5,940
Adj PAT 1,640 1,040 1,110 1,147 1,260 1,130 1,326 2,224 4,593 5,940
YoY Change (%) -23.2 8.7 19.5 93.9 -7.3 29.3
Margins (%) 5.2 3.2 3.2 2.6 3.5 2.9 3.1 3.7 3.2 3.4

KEC International Neutral

CMP: INR606 | TP: INR640 (+6%) EPS CHANGE (%): FY24|25: -|-
 Expect 20% YoY revenue growth driven by strong order  We expect EBITDA margin to expand both YoY and QoQ;
book in-line with guidance and completion of legacy projects
 Key monitorables – Order pipeline in both T&D and civil,  We would watch out for the payment cycle, particularly,
margin improvement, and NWC levels from railways and pending proceeds from Afghanistan.

Consolidated - Quarterly Snapshot (INR m)

Y/E March - INR m FY23 FY24 FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
Net Sales 33,181 40,640 43,746 55,250 42,436 44,990 52,631 70,468 1,72,817 2,10,525
YoY Change (%) 30.6 13.3 31.0 29.2 27.9 10.7 20.3 27.5 25.8 21.8
Gross profit
Total Expenditure 31,497 38,861 41,747 52,415 39,992 42,247 49,105 65,382 1,64,520 1,96,726
EBITDA 1,684 1,779 1,999 2,835 2,444 2,743 3,526 5,086 8,298 13,799
Margins (%) 5.1 4.4 4.6 5.1 5.8 6.1 6.7 7.2 4.8 6.6
Depreciation 393 399 408 415 418 465 460 460 1,615 1,803
Interest 1,000 1,277 1,493 1,616 1,587 1,778 1,673 1,505 5,386 6,543
Other Income 80 161 17 55 28 158 36 36 313 257
PBT before EO expense 371 266 115 859 467 658 1,429 3,156 1,610 5,710
Extra-Ord expense
PBT 371 266 115 859 467 658 1,429 3,156 1,610 5,710
Tax 62 -287 -62 137 44 100 286 941 -151 1,370
Rate (%) 16.6 -107.9 -53.8 15.9 9.4 15.2 20.0 29.8 -9.4 24.0
Reported PAT 309 552 176 722 423 558 1,143 2,215 1,761 4,340
Adj PAT 309 552 176 722 423 558 1,143 2,215 1,761 4,340
YoY Change (%) -32.9 -52.0 -81.2 -35.6 36.8 1.0 548.5 206.9 -53.1 146.5
Margins (%) 0.9 1.4 0.4 1.3 1.0 1.2 2.2 3.1 1.0 2.1

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Kirloskar Oil Engines Buy

CMP: INR663 | TP: INR840 (+27%) EPS CHANGE (%): FY24|25: -|-
 We expect revenue to grow 15% YoY as demand across  We expect EBITDA margin to improve 160bp QoQ on
segments is robust and realizations would get support normalization of inventories and incremental sales of HHP
from the entry into HHP. products.
 Key monitorables – Outlook on demand for both CPCB2  Update on growth strategy as well as export outlook will
and CPCB4+.products, pricing environment, and export be monitored closely in the coming quarters.
ramp up.
Standalone - Quarterly Snapshot (INR m)
Y/E March FY23 FY24 FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
Net Sales 9,530 10,104 10,001 11,526 12,647 10,590 11,529 13,271 41,161 48,036
YoY Change (%) NA 22.4 19.5 16.4 26.5 4.8 15.3 15.1 24.7 16.7
Total Expenditure 8,496 8,950 8,913 10,534 11,102 9,603 10,272 11,726 36,892 42,704
EBITDA 1,034 1,154 1,089 992 1,545 986 1,257 1,544 4,269 5,332
Margins (%) 10.8 11.4 10.9 8.6 12.2 9.3 10.9 11.6 10.4 11.1
Depreciation 205 213 212 217 213 243 213 213 848 883
Interest 11 10 19 13 14 16 12 12 54 54
Other Income 54 47 60 114 70 64 65 65 273 264
PBT before EO expense 871 978 917 875 1,388 791 1,097 1,384 3,641 4,659
PBT 871 978 917 875 1,388 791 1,097 1,384 3,641 4,659
Tax 225 252 236 226 355 205 276 384 939 1,201
Rate (%) 25.9 25.7 25.7 25.9 25.6 25.9 25.2 27.7 25.8 25.8
Reported PAT 646 726 682 649 1,032 586 820 1,001 2,703 3,458
Adj PAT 646 726 682 649 1,032 586 820 1,001 2,703 3,458
YoY Change (%) NA 80.3 169.8 -40.6 59.9 -19.3 20.3 54.2 29.9 27.9
Margins (%) 6.8 7.2 6.8 5.6 8.2 5.5 7.1 7.5 6.6 7.2

Larsen & Toubro Buy

CMP: INR3,522 | TP: INR3,900 (+11%)
 Expect consolidated revenue growth of 16% YoY, led by
18% YoY Core E&C revenue growth.
 Key monitorables – Further improvement in order inflows
from GCC region and private sector as well as working
capital cycle.
EPS CHANGE (%): FY24|25: -|-
 We expect Core E&C EBITDA margin of 8.5%, flat YoY and
up 110bp QoQ as legacy orders near completion.
 We roll forward our valuation to Mar’26 and revise our TP
on account of change in subsidiary TP.

Consolidated - Quarterly Snapshot (INR m)

Y/E March - INR m FY23 FY24 FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
Net Sales 3,58,532 4,27,626 4,63,897 5,83,352 4,78,824 5,10,240 5,38,430 5,69,041 18,33,407 20,96,541
YoY Change (%) 22.2 23.0 17.3 10.4 33.6 19.3 16.1 -2.5 17.1 14.4
Total Expenditure 3,18,965 3,78,632 4,13,166 5,15,022 4,30,137 4,53,921 4,76,434 4,93,480 16,25,785 18,53,978
EBITDA 39,567 48,994 50,731 68,330 48,686 56,320 61,996 75,561 2,07,621 2,42,563
Margins (%) 11.0 11.5 10.9 11.7 10.2 11.0 11.5 13.3 11.3 11.6
Depreciation 9,634 8,602 8,252 8,535 8,305 9,099 9,770 10,747 35,023 37,920
Interest 7,561 8,357 8,025 8,130 8,514 8,640 7,241 7,965 32,072 32,360
Other Income 6,947 7,385 7,550 7,409 11,456 11,330 7,936 5,555 29,292 36,276
PBT before EO expense 29,319 39,421 42,005 59,074 43,324 49,911 52,920 62,404 1,69,819 2,08,559
Extra-Ord expense -1,360 0 0 0 -1,360 0
PBT 29,319 39,421 43,365 59,074 43,324 49,911 52,920 62,404 1,71,179 2,08,559
Tax 6,389 11,229 12,705 14,606 12,163 11,355 13,230 14,494 44,930 51,242
Rate (%) 21.8 28.5 29.3 24.7 28.1 22.8 25.0 23.2 26.2 24.6
MI & Profit/Loss of Asso. Cos. 5,909 5,902 5,130 4,600 6,231 6,329 4,995 4,995 21,541 22,549
Reported PAT 17,021 22,289 25,529 39,868 24,930 32,226 34,696 42,915 1,04,708 1,34,767
Adj PAT 17,021 22,289 24,568 39,868 24,930 32,226 34,696 42,915 1,03,705 1,34,767
YoY Change (%) 44.9 27.4 19.6 10.1 46.5 44.6 41.2 7.6 19.6 30.0
Margins (%) 4.7 5.2 5.3 6.8 5.2 6.3 6.4 7.5 5.7 6.4

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Siemens Buy
CMP: INR4,025 | TP: INR4,600 (+14%) EPS CHANGE (%): FY24|25: -|-
 Expect 13% YoY revenue growth on healthy execution of  Expect EBITDAM to contract 260bp YoY due to execution
order book. ramp up of the locomotive order.
 Key monitorable – Margin trajectory given that Siemens  Order pipeline, export outlook and normalization of
has incurred upfront costs for the locomotive order margin to be the key monitorables.

Consolidated - Quarterly Snapshot (INR m)

Y/E September FY23 FY24E FY23 FY24E
INR m 1Q 2Q 3Q 4Q 1QE 2QE 3QE 4QE
Net Sales 40,151 48,578 48,732 58,077 45,313 55,993 56,996 68,026 1,95,538 2,26,328
YoY Change (%) 17.4 22.8 14.4 24.7 12.9 15.3 17.0 17.1 21.2 15.7
Total Expenditure 34,159 42,366 43,067 51,075 39,732 48,829 49,674 58,835 1,70,667 1,97,070
EBITDA 5,992 6,212 5,665 7,002 5,582 7,164 7,322 9,190 24,871 29,258
Margins (%) 14.9 12.8 11.6 12.1 12.3 12.8 12.8 13.5 12.7 12.9
Depreciation 761 785 876 786 834 834 834 834 3,208 3,338
Interest 37 99 43 49 57 57 57 57 228 228
Other Income 1,017 1,166 1,324 1,455 1,358 1,358 1,358 1,358 4,962 5,432
PBT before EO expense 6,211 6,494 6,070 7,622 6,048 7,630 7,789 9,657 26,397 31,124
Extra-Ord expense 0 0 0 0 0 0 0 0 -1 0
PBT 6,211 6,494 6,070 7,622 6,048 7,630 7,789 9,657 26,398 31,124
Tax 1,584 1,776 1,513 1,905 1,554 1,961 2,002 2,475 6,778 7,992
Rate (%) 25.5 27.3 24.9 25.0 25.7 25.7 25.7 25.6 25.7 25.7
Reported PAT 4,627 4,718 4,557 5,717 4,494 5,669 5,787 7,182 19,620 23,132
Adj PAT 4,627 4,718 4,557 5,717 4,494 5,669 5,787 7,182 19,619 23,132
YoY Change (%) 86.8 38.8 50.6 49.8 -2.9 20.2 27.0 25.6 55.5 17.9
Margins (%) 11.5 9.7 9.4 9.8 9.9 10.1 10.2 10.6 10.0 10.2

Thermax Neutral
CMP: INR3,087 | TP: INR3,000 (-3%) EPS CHANGE (%): FY24|25: -|-
 Expect revenue to grow 16% YoY and EBITDA margin to  We expect margins to get support from lower RM prices,
expand 70bp YoY to 8.6%. particularly in the chemical business, and up-fronting of
costs in the industrial infra segment.
 Key monitorables – large order pipeline, margin guidance  Additional investments (if any) in FEPL, TOESL and other
and subsidiary performance. subsidiaries to be monitored closely

Consolidated - Quarterly Snapshot (INR m)

Y/E March FY23 FY24E FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
Net Sales 16,545 20,753 20,493 23,108 19,330 23,025 23,740 27,383 80,898 93,477
YoY Change (%) 57.2 41.2 26.9 16.0 16.8 10.9 15.8 18.5 32.0 15.5
Total Expenditure 15,585 19,347 18,882 21,109 18,008 20,978 21,705 24,837 74,923 85,713
EBITDA 960 1,406 1,611 1,999 1,322 2,046 2,035 2,546 5,976 7,764
Margins (%) 5.8 6.8 7.9 8.7 6.8 8.9 8.6 9.3 7.4 8.3
Depreciation 286 298 291 294 294 330 299 299 1,169 1,221
Interest 66 80 91 139 134 198 170 170 376 672
Other Income 205 398 423 575 531 659 374 374 1,602 1,938
PBT before EO expense 815 1,426 1,652 2,140 1,425 2,177 1,940 2,451 6,033 7,808
Extra-Ord expense 0 0 0 0 -506 0 0 0 506
PBT 815 1,426 1,652 2,140 1,931 2,177 1,940 2,451 6,033 7,302
Tax 224 332 386 581 315 589 490 699 1,524 1,972
Rate (%) 27.5 23.3 23.3 27.2 16.3 27.0 25.3 28.5 25.3 27.0
Reported PAT 590 1,094 1,267 1,559 1,616 1,589 1,450 1,752 4,509 5,330
Adj PAT 590 1,094 1,267 1,559 1,192 1,589 1,450 1,752 4,509 5,700
YoY Change (%) 39.2 24.4 59.4 52.2 102.0 45.3 14.5 12.4 44.4 26.4
Margins (%) 3.6 5.3 6.2 6.7 6.2 6.9 6.1 6.4 5.6 6.1

January 2024 65
 December 2023 Results Preview | Sector: Capital Goods

Triveni Turbine Buy

CMP: INR420 | TP: INR520 (+24%)
 Expect healthy revenue growth of 31% YoY on account of
positive traction in domestic markets, and continued
momentum in exports and aftermarket.
 Key monitorables – Margin guidance, foray into newer
geographies and inquiry levels
EPS CHANGE (%): FY24|25: -|-
 We expect EBITDA margin to be flat YoY despite higher
aftermarket share, as we project the company to
continuously invest in geographical expansion.
 Sustainability of demand, update on API turbines and
performance of 30-100MW segment need to be observed

Consolidated - Quarterly Snapshot (INR m)

Y/E March FY23 FY24E FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
Net Sales 2,590 2,930 3,258 3,698 3,764 3,878 4,259 4,478 12,476 16,379
YoY Change (%) 40.7 41.9 44.7 56.3 45.3 32.4 30.7 21.1 237.4 31.3
Total Expenditure 2,104 2,373 2,627 3,034 3,055 3,134 3,432 3,597 10,138 13,218
EBITDA 487 557 631 663 709 744 827 882 2,338 3,161
Margins (%) 18.8 19.0 19.4 17.9 18.8 19.2 19.4 19.7 18.7 19.3
Depreciation 51 49 49 50 49 51 55 77 199 232
Interest 2 2 1 5 7 6 2 2 10 16
Other Income 75 108 119 125 133 144 112 56 426 447
PBT before EO expense 508 614 700 733 786 830 882 859 2,555 3,359
PBT 508 614 700 733 786 830 882 859 2,555 3,359
Tax 124 151 174 177 177 190 222 246 626 835
Rate (%) 24.5 24.5 24.9 24.2 22.5 22.9 25.2 28.7 24.5 24.9
MI & Profit/Loss of Asso. Cos. 3
Reported PAT 383 463 526 556 610 640 660 613 1,925 2,524
Adj PAT 383 463 526 556 610 640 660 613 1,925 2,524
YoY Change (%) 18.0 66.0 24.8 68.4 59.0 38.2 25.4 10.2 167.4 30.9
Margins (%) 14.8 15.8 16.1 15.0 16.2 16.5 15.5 13.7 15.4 15.4

January 2024 66
 December 2023 Results Preview | Sector: Cement

Cement
Company Moderate volume growth; price hikes, and low costs drive OPM
ACC Volume growth for coverage companies estimated to be up ~7% YoY
Ambuja Cements
Birla Corporation  Cement volume growth moderated during the quarter due to subdued demand
Dalmia Bharat in rural and housing segments as well as a few regional headwinds such as state
Grasim Industries elections, floods, and construction bans. We estimate ~7% YoY volume growth
India Cements for our coverage universe with industry capacity utilization of ~80% (similar to
JK Cement last year). Average EBITDA/t is estimated to increase 47% YoY/26% QoQ to
JK Lakshmi Cement INR1,119, benefitting from price improvement and cost reduction. Aggregate
The Ramco Cements EBITDA is estimated to increase 57% YoY while OPM should improve by 5.8pp
Shree Cement YoY to 19.2%. BCORP and JKCE are estimated to report robust YoY growth in
UltraTech Cement EBITDA due to benign base of last year.
 We estimate 19% YoY volume growth for TRCL, followed by 15% for JKCE and
BCORP (each), and 10% for SRCM. ACC, ACEM, DALBHARA, UTCEM, and ICEM
are likely to report volume growth of 3-7% YoY, while JKLC’s volume is estimated
to decline 2% YoY.
 GRASIM’s revenue is estimated to increase 4% YoY. Volume in VSF is estimated
to increase 33% YoY, aided by a low base. VSF realization is estimated to decline
11% YoY (down ~2% QoQ due to a price drop in later part of 3Q). Chemical
segment volume is likely to increase 6% YoY, while realization could decline by
24% YoY. We expect the company’s EBITDA to increase 21% YoY and EBITDA
margin to improve 1.3pp YoY to 9%. Adjusted PAT is estimated to grow 24% YoY.

Average cement price up 3.5% QoQ in 3QFY24

 Cement price increased in Sep-Oct’23 across regions with the highest increase in
the East at ~13%, followed by the North, West, and South in the range of 6-9%
and the Central at ~3%. However, later in Nov-Dec’23, a partial rollback
occurred as discounts, price cuts, and subdued demand led to reversals in the
previously implemented price hikes. Consequently, all-India average cement price
in 3QFY24 should be up 3.5% QoQ.
 In 3QFY24, cement price was up ~6% QoQ in the South, followed by the East at ~4%,
mainly due to significant price hikes (INR50-60/bag) in Sep-Oct’23. While, in the
North & West, price was up 3-4% QoQ in 3Q, and in the Central, price was up only
0.5%. We remain watchful for any sustainable price hike in the near term.
 Blended realization for our coverage universe is estimated to increase 2% YoY
and 3% QoQ to INR5,782/t.

Margin expansion led by price increase and cost reduction

 Average Opex/t for our coverage universe is estimated to decline 5% YoY (down
1% QoQ), mainly led by reduction in input material cost. We estimate average
variable cost/t to decline INR263/t YoY (decline of INR80/t QoQ).
 BCORP and JKCE are estimated to report strong YoY growth in EBITDA due to
benign base of last year. EBITDA is likely to grow 53-79% YoY for ACC, ACEM,
SRCM, and TRCL, 38-45% for JKLC and UTCEM, and 16% for DALBHARA. ICEM is
likely to report EBITDA of INR895m vs. operating loss of INR696m in 3QFY23.

Sanjeev Kumar Singh - Research analyst (Sanjeev.Singh@MotilalOswal.com)

Mudit Agarwal - Research analyst (Mudit.Agarwal@MotilalOswal.com)
January 2023 67
 December 2023 Results Preview | Sector: Cement

 SRCM is estimated to report the highest EBITDA/t (under our coverage universe)
of INR1,290 in 3QFY24, followed by INR1,236/INR1,227/INR1,203 for
UTCEM/JKCE/ ACEM. DALBHARA and TRCL are estimated to report EBITDA/t of
INR1,133 and INR1,040, respectively.

Demand expected to pick up; pricing and fuel cost trend key monitorables
 Cement demand moderated in Nov-Dec’23 which also put pressure on prices. All
India average cement price in Dec’23-exit was lower by 3% from 3QFY24
average. However, input cost moderated (spot imported petcoke and coal prices
declined 6-9% MoM). We believe industry volume should register a CAGR of
~7% in the long term, supported by strong demand from Infrastructure projects
and likely pick-up in commercial and private capex.
 We roll forward valuations to FY26E for our coverage universe. We continue to
prefer UTCEM in the large-cap space. We prefer DALBHARA and JKCE in the mid-
cap space, given the better growth prospects.

Exhibit 1: Summary of 3QFY24 estimates

SALES (INR M) EBDITA (INR M) NET PROFIT (INR M)
CMP
RECO Var Var Var Var Var Var
Sector (INR) Dec-23 Dec-23 Dec-23
% YoY % QoQ % YoY % QoQ % YoY % QoQ
ACC 2244 Neutral 45,234 -0.3 2.0 6,753 78.5 23.1 3,898 130.7 1.4
Ambuja Cements 535 Neutral 42,638 3.3 7.4 9,578 53.0 23.8 6,400 54.3 -0.6
Birla Corporation 1498 Buy 23,657 17.3 3.5 3,630 151.4 25.7 1,025 LP 75.0
Dalmia Bharat 2361 Buy 34,881 4.0 10.8 7,443 15.6 26.4 2,169 7.9 82.3
Grasim Industries 2126 Buy 64,532 4.2 0.2 5,791 21.4 -2.4 1,991 23.7 -75.0
India Cements 261 Sell 12,587 3.2 3.0 895 LP 1005.2 -130 Loss Loss
J K Cements 3821 Buy 29,460 20.9 7.0 5,838 136.0 25.0 2,325 496.3 29.4
JK Lakshmi Cem. 899 Buy 15,910 1.9 1.0 2,564 38.4 18.0 1,195 54.3 24.6
Ramco Cements 1014 Neutral 22,532 12.2 -3.3 4,410 54.9 10.6 1,307 94.0 29.1
Shree Cement 28462 Neutral 50,707 24.6 10.6 11,344 60.2 30.4 5,582 101.7 13.6
Ultratech Cement 10461 Buy 1,68,116 8.3 5.0 33,775 44.6 32.4 19,145 80.9 49.4
Cement 5,10,255 8.5 4.7 92,021 54.4 26.0 44,907 97.7 10.4

Exhibit 2: Expect 7% YoY growth in aggregate sales volume for our coverage universe
Aggregate Vol (mt) YoY change (%)
43.1
24.0
17.6 18.7 14.7
9.3 9.5 11.9 12.4
5.8 6.1 6.9
1.7 -2.6 0.5
-11.9
-29.3
60 60 42 56 66 75 60 60 64 75 70 66 72 84 84 75 77
3QFY20

3QFY21

4QFY21

4QFY22

1QFY24
4QFY20

1QFY21

2QFY21

1QFY22

2QFY22

3QFY22

1QFY23

2QFY23

3QFY23

4QFY23

2QFY24

3QFY24E

Source: MOFSL, Company, E: MOFSL estimate

January 2024 68
 December 2023 Results Preview | Sector: Cement

Exhibit 3: Pan-India average cement price up 3%/3.5% YoY/QoQ

3QFY23 2QFY24 3QFY24

389

382

378
375

370
369
366
364

363
362

359
358

357
355
350
347
(INR/bag)

336
334
North Central East West South Average
Source: MOFSL, Industry

Exhibit 4: Realization is estimated to grow 2%/3% YoY/QoQ Exhibit 5: Spot USA Petcoke price down 9% MoM
Realization (INR/t) USA Petcoke

(USD/t)
5,031

5,426

5,666
4,887
4,930
5,163
5,093

5,093
5,378
5,382

5,444
5,753
5,628

5,629
5,606
5,616
5,782

116
125
178
185
213
267
192
184
170
126
119
128
116
71
70
66
83
96
3QFY21

3QFY22

3QFY23
3QFY20
4QFY20
1QFY21
2QFY21

4QFY21
1QFY22
2QFY22

4QFY22
1QFY23
2QFY23

4QFY23
1QFY24
2QFY24
3QFY24E

3QFY20
4QFY20
1QFY21
2QFY21
3QFY21
4QFY21
1QFY22
2QFY22
3QFY22
4QFY22
1QFY23
2QFY23
3QFY23
4QFY23
1QFY24
2QFY24
3QFY24
Spot
Source: MOFSL; E: MOFSL estimate Source: MOFSL, Industry

Exhibit 6: Spot South African coal price down 6% MoM Exhibit 7: Expect average EBITDA/t to increase 47% YoY
South African coal Average EBITDA (INR/t)
(USD/t)

1,328

1,404
1,077

1,315
1,208
1,239

1,162

1,119
307
325
229
151
115
110
115
112
165
160
226

573

891
922

912
989
975

761
876
905
99
85
93
65
68
77
93

1QFY21

1QFY22

2QFY23

2QFY24
3QFY20
4QFY20

2QFY21
3QFY21
4QFY21

2QFY22
3QFY22
4QFY22
1QFY23

3QFY23
4QFY23
1QFY24

3QFY24E
Spot
1QFY23
2QFY23
3QFY23
4QFY23
1QFY24
2QFY24
3QFY24
3QFY20
4QFY20
1QFY21
2QFY21
3QFY21
4QFY21
1QFY22
2QFY22
3QFY22
4QFY22

Source: Bloomberg, MOFSL Source: Company, MOFSL; E: MOFSL estimate

Exhibit 8: Key operating parameters

Volume (mt) Realization (INR/t) EBITDA (INR/t)
Companies
3QFY24 YoY (%) QoQ (%) 3QFY24 YoY (INR) QoQ (INR) 3QFY24 YoY (INR) QoQ (INR)
ACC 8.0 4.1 (1.0) 5,641 (251) 166 842 351 165
Ambuja Cements 8.0 3.2 5.0 5,355 3 120 1,203 391 183
Birla Corporation 4.3 14.6 2.0 5,549 129 80 851 463 160
Dalmia Bharat 6.6 4.3 6.0 5,308 (18) 229 1,133 110 183
India Cements 2.3 7.0 (1.5) 5,392 (197) 235 383 702 349
JK Cement 4.8 14.8 4.9 6,193 314 124 1,227 630 198
JK Lakshmi Cem. 2.8 (2.0) (2.0) 5,641 214 170 909 265 154
The Ramco Cements 4.2 18.8 (8.0) 5,313 (314) 260 1,040 243 175
Shree Cement 8.8 9.5 7.3 5,764 699 170 1,290 408 228
UltraTech Cement 27.3 5.6 2.4 6,154 152 154 1,236 333 281
Sector aggregate/avg. 77.1 6.9 2.3 5,782 116 166 1,119 358 228

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 December 2023 Results Preview | Sector: Cement

Exhibit 9: Relative performance – three-months (%) Exhibit 10: Relative performance – one-year (%)
Nifty Index MOFSL Cement Index Nifty Index MOFSL Cement Index
126 136

118 122

110 108

102 94

94 80

Dec-23
Oct-23

Nov-23
Sep-23

Jun-23
Dec-22

Dec-23
Mar-23

Sep-23
Source: Bloomberg, MOFSL Source: Bloomberg, MOFSL

Exhibit 11: Valuation Summary

CMP EPS (INR) PE (x) ROE (%) EV/EBITDA (x) EV/t (USD)
Company Name INR Reco FY24E FY25E FY26E FY24E FY25E FY26E FY24E FY25E FY26E FY24E FY25E FY26E FY24E FY25E FY26E
ACC 2,244 Neutral 89.3 110.6 118.5 25.1 20.3 18.9 11.3 12.6 12.1 13.8 10.7 9.4 138 130 116
Ambuja Cements 535 Neutral 13.3 11.8 13.5 40.1 45.5 39.5 14.9 10.7 9.1 20.4 19.5 17.0 320 281 255
Birla Corporation 1,498 Buy 49.1 72.9 88.5 30.5 20.5 16.9 6.2 8.6 9.7 10.8 8.5 7.5 100 95 85
Dalmia Bharat 2,361 Buy 43.5 64.3 89.1 54.2 36.7 26.5 5.1 7.2 9.3 15.5 12.3 10.1 129 124 118
Grasim Industries 2,126 Buy 94.7 97.3 106.2 22.5 21.9 20.0 4.3 2.9 3.8 3.3 5.1 4.3 N/A N/A N/A
India Cements 261 Sell -5.6 6.4 7.8 -46.9 41.0 33.4 -3.1 3.6 4.2 51.8 15.6 14.2 91 89 87
J K Cements 3,821 Buy 101.5 116.1 150.1 37.6 32.9 25.5 15.7 15.8 17.9 15.6 13.9 12.2 195 177 173
JK Lakshmi Cem. 899 Buy 37.1 46.7 53.8 24.2 19.2 16.7 14.6 16.1 16.1 10.1 8.3 6.9 87 74 65
Ramco Cements 1,014 Neutral 19.3 30.4 38.2 52.5 33.4 26.5 6.5 9.6 11.0 17.2 13.5 11.8 173 169 164
Shree Cement 28,462 Neutral 584.7 581.6 713.9 48.7 48.9 39.9 11.0 10.1 11.3 23.1 19.9 17.5 240 229 189
Ultratech Cement 10,461 Buy 250.3 310.1 375.5 41.8 33.7 27.9 12.6 14.0 14.9 22.8 18.9 15.7 293 256 237

January 2024 70
 December 2023 Results Preview | Sector: Cement

The tables below provide a snapshot of actual and estimated numbers for companies under the MOFSL coverage
universe. Highlighted columns indicate the quarter/financial year under review.

ACC Neutral
CMP: INR2,244 | TP: INR2,300 (+3%) EPS CHANGE (%): FY24|25: -2.3|-0.3
 We expect sales volume to grow 4% YoY, whereas cement  Variable cost/t to decline 20% YoY (5% QoQ). Opex/t is
realization could decline ~4% YoY (up ~2% QoQ). estimated to decline 11% YoY (flat QoQ).
 We expect EBITDA/t at INR842 vs. INR491/INR677  ACC commenced commercial production of cement at its
YoY/QoQ. greenfield plant in Ametha, MP, from Dec’23-end.
Standalone quarterly performance (INR b)
FY23* FY24 FY23* FY24E
Y/E March
1Q 2Q 3Q 4Q 5Q 1Q 2Q 3QE 4QE
Cement Sales (mt) 7.90 7.59 6.85 7.70 8.50 9.40 8.10 8.02 9.12 38.6 34.6
Change (YoY %) (0.9) 11.0 4.3 2.8 7.6 23.8 18.2 4.1 7.3 31.3 12.2
Net Sales 44.3 44.7 39.9 45.4 47.9 52.0 44.3 45.2 50.5 222.1 192.1
Change (YoY %) 3.1 15.0 6.4 7.4 8.2 16.4 11.2 (0.3) 5.5 37.5 (13.5)
EBITDA 6.3 4.3 0.2 3.8 4.7 7.7 5.5 6.8 7.7 19.2 27.6
Margin (%) 14.3 9.5 0.4 8.3 9.7 14.8 12.4 14.9 15.1 8.6 14.4
Depreciation 1.5 1.6 1.7 1.7 1.7 2.0 2.1 2.2 2.3 8.4 8.6
Interest 0.1 0.1 0.2 0.2 0.2 0.3 0.3 0.3 0.2 0.8 1.0
Other Income 0.6 0.5 0.7 0.4 1.2 0.8 2.1 1.0 0.8 3.4 4.7
PBT before EO Item 5.3 3.0 -1.0 2.3 3.9 6.2 5.2 5.3 5.9 13.4 22.6
EO Income/(Expense) 0.0 0.0 -0.2 -0.8 -0.7 0.0 0.0 0.0 0.0 -1.6 0.0
PBT after EO Item 5.3 3.0 -1.2 1.5 3.3 6.2 5.2 5.3 5.9 11.8 22.6
Tax 1.4 0.8 -0.3 0.4 0.9 1.6 1.3 1.4 1.5 3.1 5.8
Rate (%) 25.9 25.8 26.0 26.1 27.8 25.5 25.5 26.0 25.4 26.4 25.6
Reported PAT 3.9 2.2 -0.9 1.1 2.4 4.6 3.8 3.9 4.4 8.7 16.8
Adjusted PAT 3.9 2.2 -0.8 1.7 2.9 4.6 3.8 3.9 4.4 9.9 16.8
Margin (%) 8.8 5.0 -1.9 3.7 6.0 8.9 8.7 8.6 8.7 4.5 8.7
Change (YoY %) (30.1) (60.5) NM (47.4) (26.6) 108.8 NM 130.7 54.4 (47.6) 69.7
*Note: FY23 was 15-month period as the company changed its accounting year-end from December to March

Ambuja Cements Neutral

CMP: INR535 | TP: INR490 (-8%) EPS CHANGE (%): FY24|25: -1.1|-0.7
 Sales volume to increase 3% YoY, while realization is  We expect variable cost/t to decline 14% YoY (down 3%
estimated to be flat YoY (up 2% QoQ). QoQ). Opex/t to decline 9% YoY (down 1% QoQ).
 EBITDA/t is expected to be at INR1,203 vs.  ACEM has completed the acquisition of a majority stake in
INR812/INR1,020 YoY/QoQ. Sanghi Industries during the quarter.
Standalone quarterly performance (INR b)
FY23* FY24 FY23* FY24E
Y/E December/March
1Q 2Q 3Q 4Q 5Q 1Q 2Q 3QE 4QE
Sales Volume (mt) 7.49 7.39 7.04 7.71 8.07 9.08 7.58 7.96 8.62 37.78 33.25
Change (YoY %) 3 15 14 8 8 23 8 3 7 12 10
Realization (INR/t) 5,243 5,404 5,220 5,352 5,273 5,209 5,235 5,355 5,306 5,226 5,236
Change (YoY %) 5 3 (0) 3 1 (4) 0 0 1 2 0
Net Sales 39.3 39.9 36.8 41.3 42.6 47.3 39.7 42.6 46.2 199.9 175.9
Change (YoY %) 8.4 18.5 13.5 10.5 8.4 18.4 8.0 3.3 8.6 43.0 -12.0
EBITDA 7.9 6.8 3.1 6.3 7.9 9.5 7.7 9.6 10.1 32.2 36.9
Margin (%) 20.2 17.1 8.5 15.2 18.5 20.1 19.5 22.5 21.9 16.1 21.0
Depreciation 1.5 1.5 1.6 1.6 2.0 2.3 2.3 2.3 2.4 8.3 9.3
Interest 0.2 0.3 0.2 0.3 0.3 0.4 0.4 0.4 0.4 1.3 1.6
Other Income 0.3 6.3 0.4 0.9 1.7 1.9 3.8 1.9 2.0 9.5 9.6
PBT before EO Item 6.5 11.4 1.7 5.3 7.2 8.7 8.8 8.7 9.4 32.1 35.6
Extraordinary Inc./(Exp.) 0.0 0.0 -0.2 -0.6 -0.8 0.0 0.0 0.0 0.0 -1.6 0.0
PBT after EO Exp./(Inc.) 6.5 11.4 1.6 4.6 6.4 8.7 8.8 8.7 9.4 30.6 35.6
Tax 1.6 0.9 0.2 0.9 1.4 2.2 2.4 2.3 2.2 5.0 9.1
Prior period tax adj. and reversal 0.0 1.5 0.0 0.0 0.0 0.0 0.0 0.0 0.0 1.5 0.0
Rate (%) 24.2 21.1 11.7 20.4 21.9 25.6 26.8 26.8 23.4 21.3 25.6
Reported Profit 4.9 10.5 1.4 3.7 5.0 6.4 6.4 6.4 7.2 25.5 26.5
Adj. PAT 4.9 9.0 1.5 4.1 5.6 6.4 6.4 6.4 7.2 25.2 26.5
Change (YoY %) (25.6) 24.2 (65.9) 37.9 13.8 (28.2) 328.5 54.3 27.8 18.4 5.0
*Note: FY23 is 15-month period as the company changed its accounting year-end from December to March

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 December 2023 Results Preview | Sector: Cement

Birla Corporation Buy

CMP: INR1,498 | TP: INR1,800 (+20%) EPS CHANGE (%): FY24|25: +0.4|--
 We estimate a volume growth of 15% YoY. Realization is  Variable cost/t is estimated to decline 7% YoY (5% QoQ).
expected to increase 3% YoY (up 2% QoQ). Opex/t is also estimated to decline 7% YoY (2% QoQ).
 We expect EBITDA/t at INR851 vs. INR388/INR691 in  BCORP is likely to report a net profit of INR1b vs. a net loss
3QFY23/2QFY24. of INR500m in 3QFY23.
Consolidated performance (INR b)
Y/E March FY23 FY24 FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
Sales volume (mt) 3.93 3.64 3.72 4.44 4.41 4.18 4.26 4.75 15.73 17.60
Change (YoY %) 17.3 11.3 11.0 4.7 12.2 14.8 14.6 6.9 10.6 11.9
Cement Realization (INR/t) 5,344 5,151 5,177 5,279 5,229 5,211 5,321 5,282 5,242 5,262
Change (YoY %) 8.1 5.6 4.9 4.1 (2.2) 1.2 2.8 0.1 5.7 0.4
Net Sales 22.0 20.0 20.2 24.6 24.1 22.9 23.7 26.3 86.8 96.9
Change (YoY %) 26.0 17.8 15.2 8.8 9.3 14.3 17.3 6.9 16.4 11.6
EBITDA 2.6 0.9 1.4 2.7 3.0 2.9 3.6 4.4 7.7 13.9
Margin (%) 11.8 4.7 7.2 11.1 12.4 12.6 15.3 16.8 8.9 14.4
Depreciation 1.1 1.3 1.3 1.4 1.4 1.4 1.5 1.5 5.1 5.8
Interest 0.7 0.9 0.9 0.9 1.0 1.0 1.0 1.0 3.4 3.9
Other Income 0.1 0.4 0.1 0.5 0.2 0.3 0.2 0.2 1.1 0.8
Profit before Tax 0.9 -0.8 -0.6 0.9 0.8 0.8 1.4 2.1 0.4 5.0
EO (Income)/Expense 0.1 - - (0.2) - 0.0 - - (0.1) 0.0
Profit before Tax after EO 0.8 -0.8 -0.6 1.1 0.8 0.8 1.4 2.1 0.4 5.0
Tax 0.2 -0.3 -0.1 0.3 0.2 0.2 0.3 0.6 0.0 1.3
Rate (%) 19.7 31.5 22.6 24.8 21.7 24.3 25.0 26.4 6.1 25.0
Reported PAT 0.6 -0.6 -0.5 0.8 0.6 0.6 1.0 1.6 0.4 3.8
Adj. PAT 0.7 -0.6 -0.5 0.7 0.6 0.6 1.0 1.6 0.4 3.8
Margin (%) 3.2 -2.8 -2.5 2.9 2.5 2.6 4.3 6.0 0.4 3.9
Change (YoY %) (49.6) NM NM (48.5) (16.2) NM NM 121.4 (91.4) 948.6

Dalmia Bharat Buy

CMP: INR2,361| TP: INR2,800 (+19%) EPS CHANGE (%): FY24|25: -3.5|-0.1
 We estimate sales volume to grow 4% YoY. Realization to  We estimate variable cost/t to decline 6% YoY (flat QoQ).
be flat YoY, up 4% YoY, led by price hike in key markets. While, opex/t is likely to decline 3% YoY (up 1% QoQ).
 We estimate EBITDA/t to be at INR1,133 vs. INR1,022/  It has commenced commercial production of 0.9mtpa
INR950 in 3QFY23/2QFY24. grinding capacity at Belgaum, Karnataka, from Nov’23.
Consolidated performance (INR b)
Y/E March FY23 FY24 FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
Sales volume (mt) 6.2 5.8 6.3 7.4 7.0 6.2 6.6 8.0 25.7 27.8
Change (YoY %) 26.8 13.7 10.5 12.1 12.4 6.9 4ss.3 8.3 15.3 8.0
Realization (INR/t) 5,326 5,122 5,325 5,286 5,199 5,079 5,308 5,235 5,268 5,208
Change (YoY %) 0.5 1.2 11.0 3.2 -2.4 -0.8 -0.3 -1.0 4.1 -1.1
Net Sales 33.0 29.7 33.6 39.1 36.2 31.5 34.9 42.0 135.4 144.6
Change (YoY %) 27.4 15.1 22.7 15.7 9.8 6.0 4.0 7.2 20.0 6.8
EBITDA 5.9 3.8 6.4 7.1 6.1 5.9 7.4 9.5 23.2 28.9
Margin (%) 17.7 12.8 19.2 18.1 16.8 18.7 21.3 22.5 17.1 20.0
Depreciation 3.1 3.3 3.3 3.4 4.0 4.0 4.1 4.1 13.1 16.2
Interest 0.5 0.6 0.7 0.6 0.8 1.0 1.0 1.0 2.3 3.9
Other Income 0.2 0.4 0.4 0.4 0.6 0.9 0.7 0.6 1.4 2.7
PBT before EO Expense 2.5 0.3 2.9 3.5 1.9 1.7 3.1 4.9 9.2 11.5
Extra-Ord. expense 0.0 0.0 0.0 -3.9 0.0 0.0 0.0 0.0 -3.9 0.0
PBT after EO Expense 2.5 0.3 2.9 7.3 1.9 1.7 3.1 4.9 13.0 11.5
Tax 0.6 -0.2 0.7 1.3 0.4 0.5 0.8 1.3 2.4 2.9
Prior period tax adj. 0.0 -0.3 0.0 0.0 0.0 0.0 0.0 0.0 -0.3 0.0
Rate (%) 25.5 23.3 25.5 36.5 22.2 27.9 26.0 25.8 29.6 25.6
Reported PAT (pre-minority) 1.9 0.5 2.1 6.1 1.4 1.2 2.3 3.6 10.6 8.6
Minority + associate -0.1 -0.1 0.1 0.2 0.1 0.1 0.1 0.1 0.2 0.4
PAT Adj. for EO items 2.0 0.3 2.0 2.6 1.3 1.2 2.2 3.5 6.9 8.2
Change (YoY %) -30.4 -87.4 286.5 -1.9 -33.3 325.0 7.9 34.2 -16.5 19.1

January 2024 72
 December 2023 Results Preview | Sector: Cement

Grasim Industries Buy

CMP: INR2,126 | TP: INR2,590 (+22%) EPS CHANGE (%): FY24|25: -5.4|-8.0
 We expect revenue for the VSF segments to grow 18%  We expect blended EBITDA/kg of INR17.6 for the VSF
YoY, while for the Chemical segment to drop 20% YoY. segment vs. INR3.9/INR21.2 in 3QFY23/2QFY24.
 EBITDA for the VSF segment is expected to grow 6x YoY  Standalone EBITDA is expected to grow 21% YoY to
and OPM is expected to increase 8.2pp YoY to 10.2%. INR5.8b and OPM is estimated to increase 1.3pp YoY to
 Chemical segment’s EBITDA is expected to decline 48% 9%.
YoY, and OPM should contract 6.6pp YoY to 12.3%.  Adjusted profit to increase 24% YoY to INR2b (-75% QoQ
as dividend from UTCEM was accounted in 2Q).
Standalone performance (INR b)
Y/E March FY23 FY24 FY23 FY24E
(Standalone) 1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
Net Sales 72.5 67.5 62.0 66.5 62.4 64.4 64.5 66.9 268.4 258.2
Change (YoY %) 92.8 36.7 7.1 4.2 (14.0) (4.5) 4.2 0.6 28.7 (3.8)
EBITDA 13.2 9.6 4.8 4.3 6.7 5.9 5.8 6.9 31.8 25.4
Margin (%) 18.2 14.2 7.7 6.4 10.8 9.2 9.0 10.3 11.8 9.8
Depreciation 2.6 2.7 2.8 3.0 2.9 2.9 3.0 3.2 11.0 12.0
Interest 0.9 0.9 0.9 1.1 1.1 1.1 1.1 1.2 3.7 4.4
Other Income 0.4 7.6 1.0 1.2 1.2 7.6 1.1 1.2 10.2 11.1
PBT before EO Items 10.2 13.6 2.2 1.4 4.0 9.6 2.8 3.7 27.3 20.1
Extraordinary Inc./(Exp.) - (0.9) - - - - - - (0.9) -
PBT after EO Items 10.2 12.7 2.2 1.4 4.0 9.6 2.8 3.7 26.5 20.1
Tax 2.1 3.1 -0.4 0.4 0.4 1.6 0.9 1.4 5.2 4.2
Rate (%) 20.9 24.2 (19.7) 30.9 10.2 16.8 30.0 36.4 19.7 21.0
Reported PAT 8.1 9.6 2.6 0.9 3.6 7.9 2.0 2.4 21.2 15.9
Prior period tax/DTL reversal - - (1.0) - - - - - (1.0) -
Adj. PAT 8.1 10.3 1.6 0.9 3.6 7.9 2.0 2.4 20.9 15.9
Margin (%) 11.1 15.3 2.6 1.4 5.7 12.3 3.1 3.5 7.8 6.1
Change (YoY %) 81.3 8.8 (67.1) (73.2) (56.1) (22.9) 23.7 152.9 (6.2) (24.3)

India Cements Sell

CMP: INR261 | TP: INR185 (-29%) EPS CHANGE (%): FY24|25: NA|+4.3
 We expect volume to grow 7% YoY and blended  We expect variable cost/t to decline 23%/4% YoY/QoQ.
realization to decline 4% YoY (however should be up 5% Opex/t is estimated to decline 15%/2% YoY/QoQ.
QoQ).  ICEM should report a net loss of INR130m vs. a loss of
 We estimate blended EBITDA/t of INR383 vs. operating INR1.4b/INR814m in 3QFY23/2QFY24.
loss/t at INR319 in 3QFY23.
Standalone performance (INR b)
Y/E March FY23 FY24 FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
Sales volume (mt) 2.7 2.3 2.2 2.8 2.7 2.4 2.3 3.0 9.9 10.4
Change (YoY %) 37.4 (4.5) 3.5 4.8 (0.2) 5.1 7.0 8.3 9.1 5.0
Realization (INR/t) 5,413 5,566 5,589 5,244 5,225 5,157 5,392 5,180 5,439 5,234
Change (YoY %) 3.0 10.4 6.3 0.1 (3.5) (7.4) (3.5) (1.2) 4.7 (3.8)
Net Sales 14.5 12.5 12.2 14.6 13.9 12.2 12.6 15.6 53.8 54.4
Change (YoY %) 41.4 5.4 10.0 4.9 (3.7) (2.6) 3.2 7.0 14.2 1.0
EBITDA 0.3 (0.9) (0.7) (0.4) 0.1 0.1 0.9 1.0 (1.7) 2.1
Margin (%) 2.1 (7.3) (5.7) (3.0) 0.4 0.7 7.1 6.7 (3.2) 3.8
Depreciation 0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.6 2.1 2.2
Interest 0.6 0.7 0.6 0.5 0.6 0.6 0.6 0.6 2.3 2.3
Other Income 0.1 0.0 0.0 0.2 0.1 0.1 0.1 0.1 0.3 0.3
PBT before EO expense (0.7) (2.1) (1.8) (1.3) (1.0) (1.0) (0.2) (0.0) (5.9) (2.1)
Extra-Ord. expense - - (2.9) 1.1 - - - - (1.8) -
PBT (0.7) (2.1) 1.1 (2.4) (1.0) (1.0) (0.2) (0.0) (4.1) (2.1)
Tax (1.5) (0.7) 0.2 (0.2) (0.2) (0.2) (0.0) 0.0 (2.2) (0.4)
Rate (%) 205.7 33.5 20.5 10.1 23.9 17.6 17.6 (93.1) 53.7 20.0
Reported PAT 0.8 (1.4) 0.9 (2.2) (0.8) (0.8) (0.1) (0.0) (1.9) (1.7)
Tax (1.5) - - (0.2) - - - - (1.7) -
Adj. PAT (0.7) (1.4) (1.4) (1.2) (0.8) (0.8) (0.1) (0.0) (4.7) (1.7)
Change (YoY %) NM NM NM NM NM NM NM NM NM NM
Margin (%) (5.0) (11.0) (11.7) (7.9) (5.4) (6.7) (1.0) (0.1) (8.7) (3.2)

January 2024 73
 December 2023 Results Preview | Sector: Cement

JK Cement Buy
CMP: INR3,821 | TP: INR4,400 (+15%) EPS CHANGE (%): FY24|25: +3.1|+2.8
 We estimate JKCE’s volume to grow 15% YoY, aided by  Opex/t is estimated to decline 6% YoY/1% QoQ. Variable
increased capacity utilization at Panna, MP plant. Blended cost/t is likely to decline 13% YoY (decline by 3% QoQ).
realization is estimated to increase 5% YoY/2% QoQ.  JKCE has commissioned 1.5mtpa greenfield grinding unit
 We estimate EBITDA/t at INR1,227 vs. INR597/INR1,029 in at Ujjain, Madhya Pradesh. Its total grey cement capacity
3QFY23/2QFY24. increased to 22.2mtpa.
Consolidated performance (INR b)
Y/E March FY23 FY24 FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
Sales volume (mt) 3.7 3.6 4.1 4.7 4.6 4.5 4.8 5.2 16.23 19.08
Change (YoY %) 22.0 9.4 24.8 15.8 25.4 24.5 14.8 10.3 16.4 17.5
Realization (INR/t) 6,149 6,138 5,879 5,947 5,968 6,068 6,193 6,006 5,988 6,058
Change (YoY %) 8.6 7.9 (3.8) 2.1 (2.9) (1.1) 5.3 1.0 4.5 1.2
Net Sales 22.7 22.4 24.4 27.8 27.6 27.5 29.5 31.0 97.2 115.6
Change (YoY %) 32.4 18.0 20.0 18.1 21.7 23.1 20.9 11.4 21.6 18.9
EBITDA 18.7 19.2 21.9 24.3 23.5 22.9 23.6 24.8 84.1 94.9
Margin (%) 4.0 3.1 2.5 3.5 4.1 4.7 5.8 6.1 13.1 20.7
Depreciation 17.8 14.0 10.2 12.6 14.8 17.0 19.8 19.7 13.5 17.9
Interest 1.1 1.1 1.2 1.3 1.3 1.4 1.4 1.4 4.6 5.5
Other Income 0.7 0.7 0.8 1.0 1.1 1.2 1.2 1.2 3.1 4.6
PBT before EO expense 0.2 0.1 0.2 0.4 0.3 0.3 0.3 0.3 0.9 1.2
Extra-Ord. expense 2.5 1.5 0.7 1.6 2.0 2.4 3.6 3.8 6.3 11.8
PBT - - - - 0.2 - - - - 0.2
Tax 2.5 1.5 0.7 1.6 1.8 2.4 3.6 3.8 6.3 11.7
Profit from associate and MI 0.9 0.4 0.3 0.5 0.7 0.7 1.3 1.4 2.1 4.0
Rate (%) (0.0) (0.0) (0.0) (0.0) (0.0) (0.0) - - (0.1) (0.0)
Reported PAT 35.8 27.6 46.2 30.5 37.2 26.9 35.0 36.2 32.5 33.8
Adj. PAT 1.6 1.1 0.4 1.1 1.1 1.8 2.3 2.4 4.3 7.7
Change (YoY %) 1.6 1.1 0.4 1.1 1.2 1.8 2.3 2.4 4.3 7.8

JK Lakshmi Buy
CMP: INR899 | TP: INR1,010 (+12%) EPS CHANGE (%): FY24|25: +0.3|+0.8
 Sales volume is expected to decline 2% YoY/QoQ. While  We expect Opex/t to decline by only 1% YoY. Variable cost
realization is expected to improve 4% YoY/3% QoQ. is likely to decline 2% YoY/1% QoQ.
 EBITDA/t is estimated at INR909 vs. INR644/INR755 in  PAT is estimated to grow 54% YoY to INR1.2b.
3QFY23/2QFY24.
Consolidated performance (INR b)
Y/E March FY23 FY24 FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
Sales volume (mt) 3.03 2.53 2.88 3.39 3.21 2.88 2.82 3.67 11.83 12.57
Change (YoY %) 7.3 2.4 10.3 2.9 5.7 13.8 (2.0) 8.3 6 6
Realization (INR/t) 5,456 5,431 5,426 5,496 5,399 5,471 5,641 5,563 5,455 5,518
Change (YoY %) 16.3 11.0 10.2 13.1 (1.0) 0.7 4.0 1.2 12.7 1.2
Net Sales 16.5 13.7 15.6 18.6 17.3 15.7 15.9 20.4 64.5 69.4
Change (YoY %) 24.8 13.6 21.5 16.4 4.6 14.6 1.9 9.6 19.0 7.5
EBITDA 2.6 1.6 1.9 2.3 2.0 2.2 2.6 3.1 8.4 9.8
Margin (%) 15.5 11.9 11.9 12.5 11.3 13.8 16.1 15.4 13.0 14.2
Depreciation 0.6 0.6 0.6 0.6 0.6 0.6 0.7 0.7 2.3 2.5
Interest 0.4 0.3 0.4 0.3 0.3 0.3 0.3 0.3 1.3 1.3
Other Income 0.1 0.2 0.1 0.2 0.1 0.1 0.2 0.2 0.6 0.6
PBT before EO expense 1.7 0.9 1.1 1.6 1.2 1.4 1.7 2.3 5.3 6.6
Extra-Ord. expense - - - - - - - - - -
PBT 1.7 0.9 1.1 1.6 1.2 1.4 1.7 2.3 5.3 6.6
Tax 0.6 0.3 0.3 0.5 0.4 0.5 0.5 0.7 1.7 2.0
Prior period tax adj. - - - - - - - - - -
Rate (%) 33.1 33.8 27.9 29.0 32.7 32.0 30.0 29.1 30.9 30.6
Reported PAT 1.2 0.6 0.8 1.1 0.8 1.0 1.2 1.6 3.7 4.6
Adj. PAT 1.2 0.6 0.8 1.1 0.8 1.0 1.2 1.6 3.7 4.6
Change (YoY %) (15.5) (29.2) 17.7 (46.7) (30.7) 55.2 54.3 42.8 (26.9) 24.4

January 2024 74
 December 2023 Results Preview | Sector: Cement

The Ramco Cements Neutral

CMP: INR1,014 | TP: INR1,130 (+11%) EPS CHANGE (%): FY24|25: -2.8|+1.0
 We expect volumes to rise 19% YoY. Realization is likely to  Expect variable cost and freight cost per tonne to decline
increase ~5% YoY, led by price hikes in key markets. 17%/5% YoY, respectively. Opex/t to decline ~12% YoY.
 EBITDA/t is estimated at INR1,040 vs. INR797/INR865 in  PAT is estimated to increase 94% YoY to INR1.3b.
3QFY23/2QFY24.
Quarterly performance (INR b)
Y/E March FY23 FY24 FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
Sales Volume (mt) 3.31 3.35 3.57 4.70 4.30 4.61 4.24 4.87 15.02 18.02
Change (YoY %) 54.6 23.5 18.7 45.5 29.9 37.7 18.8 3.7 34.8 20.0
Cement Realization (INR/t) 5,298 5,253 5,623 5,464 5,212 5,053 5,313 5,209 5,384 5,194
Change (YoY %) (6.2) (2.5) 9.4 3.4 (1.6) (3.8) (5.5) (4.7) 1.3 (3.5)
Net Sales 17.7 17.8 20.1 25.7 22.4 23.3 22.5 25.4 81.4 93.6
Change (YoY %) 44.3 19.5 29.7 50.3 26.4 30.5 12.2 (1.2) 36.0 15.1
EBITDA 3.0 1.8 2.8 4.1 3.4 4.0 4.4 4.7 11.8 16.5
Margin (%) 17.0 10.3 14.2 16.1 15.2 17.1 19.6 18.6 14.5 17.7
Depreciation 1.1 1.2 1.4 1.4 1.5 1.6 1.6 1.6 5.0 6.3
Interest 0.5 0.6 0.6 0.8 0.9 1.2 1.1 1.1 2.4 4.4
Other Income 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.4 0.4
PBT before EO expense 1.5 0.2 1.0 2.1 1.1 1.4 1.8 2.1 4.7 6.3
PBT 1.5 0.2 1.0 2.1 1.1 1.4 1.8 2.1 4.7 6.3
Tax 0.4 0.0 0.3 0.5 0.3 0.4 0.5 0.6 1.3 1.8
Prior year tax adj. - - - - - - - - - -
Rate (%) 27.0 28.4 30.7 26.3 27.0 26.7 28.0 29.4 27.5 28.0
Reported PAT 1.1 0.1 0.7 1.5 0.8 1.0 1.3 1.5 3.4 4.6
Adj. PAT 1.1 0.1 0.7 1.5 0.8 1.0 1.3 1.5 3.4 4.6
Change (YoY %) (33.6) (94.7) (18.4) 23.7 (29.7) 783.2 94.0 (4.4) (41.8) 32.9
Margin (%) 6.3 0.6 3.4 5.9 3.5 4.3 5.8 5.7 4.2 4.9

Shree Cement Neutral

CMP: INR28,462| TP: INR27,000 (-5%) EPS CHANGE (%): FY24|25: +2.9|+0.2
 We expect volume to increase 10% YoY, supported by  We expect cement realization to improve ~3% QoQ and
capacity addition of 3mtpa in Purulia, West Bengal. Opex/t to decline ~1% QoQ.
 We estimate EBITDA/t at INR1,290 vs. INR881/INR1,062 in  SRCM commissioned a greenfield integrated cement plant
3QFY23/2QFY24. at Nawalgarh, Rajasthan, with a clinker/cement capacity of
3.8mtpa/3.5mtpa in mid-Dec’23.
Standalone quarterly performance (INR b)
FY23 FY24 FY23 FY24E
Y/E March 1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
Sales Volume (mt) 7.50 7.46 8.03 8.83 8.92 8.20 8.80 9.50 31.82 35.26
Change (YoY %) 9.7 18.0 22.6 10.0 18.8 9.9 9.5 7.7 14.7 10.8
Blended Realization (INR/t) 5,602 5,071 5,065 5,420 5,607 5,594 5,764 5,557 5,292 5,654
Change (YoY %) 11.1 0.0 -6.6 6.2 0.1 10.3 13.8 2.5 2.4 6.8
Net Sales 42.0 37.8 40.7 47.9 50.0 45.8 50.7 52.8 168.4 199.4
Change (YoY %) 21.8 17.9 14.6 16.7 18.9 21.3 24.6 10.4 17.5 18.4
EBITDA 8.2 5.2 7.1 8.9 9.3 8.7 11.3 12.0 29.4 41.4
Margin (%) 19.5 13.8 17.4 18.7 18.7 19.0 22.4 22.7 17.5 20.8
Depreciation 3.3 3.6 4.1 4.4 3.1 3.3 3.9 5.2 15.5 15.5
Interest 0.6 0.7 0.7 0.7 0.8 0.7 0.8 1.0 2.7 3.2
Other Income -0.2 1.6 1.6 1.4 1.6 1.3 1.1 1.1 4.3 5.1
PBT before EO Exp. 4.1 2.5 3.8 5.1 7.1 6.0 7.8 6.9 15.6 27.8
Extra-Ord. Expense 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
PBT 4.1 2.5 3.8 5.1 7.1 6.0 7.8 6.9 15.6 27.8
Tax 1.0 0.6 1.1 -0.3 1.3 1.1 2.2 2.1 2.3 6.7
Rate (%) 23.4 23.9 28.0 23.6 18.2 17.6 28.0 30.9 14.8 24.0
Reported PAT 3.2 1.9 2.8 5.5 5.8 4.9 5.6 4.8 13.3 21.1
Prior period Tax adjustment 0.0 0.0 0.0 -1.5 0.0 0.0 0.0 0.0 -1.5 0.0
Adj. PAT 3.2 1.9 2.8 3.9 5.8 4.9 5.6 4.8 11.7 21.1
Change (YoY %) -52.3 -66.9 -43.7 -28.1 84.2 159.1 101.7 22.2 -48.3 79.7

January 2024 75
 December 2023 Results Preview | Sector: Cement

UltraTech Cement Buy

CMP: INR10,461 | TP: INR12,000 (+15%) EPS CHANGE (%): FY24|25: -2.8|-0.9
 Sales volumes (consolidated) increased 6% YoY and we  Variable cost per tonne is expected to decline 10% YoY
estimate blended realization to increase ~3% YoY/QoQ. (4% QoQ). Expect Opex/t to decline 4% YoY (3% QoQ).
 RMC revenue is expected to increase 26% YoY. White  EBITDA is estimated to grow 45% YoY and OPM to surge
cement revenue is expected to increase 18% YoY. 5pp YoY to 20%.
 We expect EBITDA/t at INR1,236 vs. INR903/INR956 in  UTCEM announced the acquisition of the cement business
3QFY23/2QFY24. of Kesoram Industries having grinding capacity of
10.5mtpa.
Consolidated performance (INR b)
FY23 FY24 FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
Sales Volume (mt) 25.0 23.1 25.9 31.7 30.0 26.7 27.3 33.1 106.2 117.1
Change (YoY %) 16.3 6.7 11.8 14.4 19.6 15.5 5.6 4.5 12.9 10.3
Blended Realn. (INR/t) 6,056 6,014 6,002 5,893 5,920 5,999 6,154 5,968 5,957 6,006
Change (YoY %) 10.2 8.3 6.9 3.5 -2.2 -0.2 2.5 1.3 6.5 0.8
Change (QoQ %) 6.4 -0.7 -0.2 -1.8 0.5 1.3 2.6 -3.0
Net Sales 151.6 138.9 155.2 186.6 177.4 160.1 168.1 197.6 632.4 703.2
Change (YoY %) 28.2 15.6 19.5 18.4 17.0 15.3 8.3 5.9 20.2 11.2
Total Expenditure 120.7 120.3 131.9 153.4 146.9 134.6 134.3 157.3 526.2 573.2
EBITDA 30.9 18.7 23.4 33.2 30.5 25.5 33.8 40.2 106.2 130.0
Margin (%) 20.4 13.4 15.0 17.8 17.2 15.9 20.1 20.4 16.8 18.5
Depreciation 7.0 7.1 7.2 7.6 7.5 8.0 7.9 8.1 28.9 31.5
Interest 2.2 2.0 2.2 1.9 2.1 2.3 2.3 2.0 8.2 8.7
Other Income 1.1 1.5 1.3 1.2 1.7 1.7 1.7 1.8 5.0 6.9
PBT before EO expense 22.9 11.0 15.2 24.9 22.6 16.9 25.3 31.9 74.1 96.7
Extra-Ord. expense - - - - - - - - - -
PBT after EO Expense 22.9 11.0 15.2 24.9 22.6 16.9 25.3 31.9 74.1 96.7
Tax 7.1 3.4 4.6 8.2 5.8 4.1 6.1 8.3 23.4 24.3
Prior period tax adjustment 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Rate (%) 31.0 31.2 30.5 33.0 25.5 24.3 24.3 26.0 31.6 25.1
Reported PAT 15.8 7.6 10.6 16.7 16.9 12.8 19.2 23.6 50.7 72.4
Minority Interest -0.1 0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.0 0.1
Adj. PAT 15.9 7.6 10.6 16.7 16.9 12.8 19.1 23.5 50.7 72.3
Change (YoY %) -6.7 -42.5 -9.7 12.7 6.3 69.6 80.9 41.0 -10.6 42.7

January 2024 76
 December 2023 Results Preview | Sector: Specialty Chemicals

Specialty Chemicals
Company No visible indications of demand resurgence
Alkyl Amines
 Brent crude price averaged USD83.7/bbl in 3QFY24, down 3.4% QoQ, as demand
Atul
Clean Science
concerns continued to overshadow the impact of supply cuts by OPEC+.
However, we expect Brent price to remain at USD85/bbl during FY25-26 as: 1)
Deepak Nitrite
global oil and oil product inventories stand at the lower end of the last five-year
Fine Organics
average, and 2) production cuts by OPEC+ to continue through CY24.
Galaxy Surfactants
Navin Fluorine
 Prices of organic compounds such as Propylene (Korea)/Butadiene (Korea)/
NOCIL
Benzene increased 5%/23%/5% QoQ, while prices of Toluene (Korea) declined
Vinati Organics
11% QoQ. Prices of other key materials, such as Acetic Acid/Aniline/Phenol
were down 5%/4%/2% QoQ. Price of Acetone rose 11% QoQ, while prices of
IPA/ACN were up 5%/down 2% QoQ. Blended Phenol and Acetone spread
stood at INR91/kg (up 1% QoQ). Ammonia price declined 50% QoQ.
 We estimate our coverage universe to report: 1) a sales decline of 12% YoY
(flat QoQ), 2) an EBITDA contraction of 19% YoY (up 3% QoQ), and 3) a PAT
decline of 23% YoY (up 2% QoQ) in 3QFY24. EBITDAM may contract 140bp YoY
(up 50bp QoQ). Margin contraction is anticipated to be the most for AACL,
ATLP, FINEORG, NFIL and VO. EBITM is expected to contract 220bp YoY (up
30bp QoQ) in 3Q. PAT margin is likely to decline 160bp YoY (up 20bp QoQ).
 The downward trend in realization is expected to continue for most of the
companies in 3QFY24 as well, after peaking in 4QFY22 and 1QFY23. While
moderating RM prices have provided some respite, most of the chemical
companies would have to pass on the benefits of this reduction in input costs to
customers. 3QFY24 is likely to be yet another muted quarter amid persisting global
macro headwinds, a slower-than-expected pickup in consumption, and aggressive
dumping by the Chinese players.
 Contrary to the optimism that demand is likely to pick up, data shows that
volumes have actually declined in the two months of 3Q. FY24 is broadly
expected to be subdued, but we believe that the situation is going to improve (if
at all) post-1HCY24E. Managements of various companies too have started
getting vocal or indicating in one way or another about this prolonged weakness
in the industry, which is going to continue into CY24.
 Capacity expansion plans have been delayed by most of the companies,
although none of them have been shelved completely given the promising long-
term volume off-take for the products. However, we expect a migration of
chemical industries towards the US, the Middle East, and Africa in the long term,
where cheaper feedstock is available. The valuation multiples of companies
remain elevated with no real reason for the stocks to run up in the short term.
We have a BUY rating on GALSURF and VO.

Abhishek Nigam – Research Analyst (Abhishek.Nigam@MotilalOswal.com)

January 2024
Research Analyst: Aman Chowdhary (Aman.Chowdhary@MotilalOswal.com) | Rohit Thorat (Rohit.Thorat@MotilalOswal.com) 77
 December 2023 Results Preview | Sector: Specialty Chemicals

Exhibit 1: Expected quarterly performance summary

SALES (INR M) EBDITA (INR M) NET PROFIT (INR M)
CMP
RECO Var Var Var Var Var Var
Sector (INR) Dec-23 Dec-23 Dec-23
% YoY % QoQ % YoY % QoQ % YoY % QoQ
Alkyl Amines 2701 Neutral 3,369 -13.3 -4.3 456 -34.4 -5.5 267 -41.6 -2.0
Atul 7145 Neutral 11,041 -12.9 -7.5 1,102 -36.1 -29.0 565 -45.1 -38.0
Clean Science 1591 Neutral 1,995 -16.0 10.1 895 -17.3 19.6 624 -25.5 19.5
Deepak Nitrite 2475 Neutral 18,467 -7.3 3.9 3,571 13.5 18.1 2,500 19.6 21.9
Fine Organic 4961 Sell 4,451 -40.6 -5.7 917 -47.5 -12.1 702 -46.5 -11.6
Galaxy Surfactants 2775 Buy 9,691 -10.3 -1.4 1,336 -13.3 7.0 860 -19.0 11.1
Navin Fluorine 3857 Neutral 5,557 -1.4 17.8 1,268 -18.5 28.9 661 -38.0 9.1
NOCIL 274 Neutral 3,683 13.1 5.0 546 48.6 23.7 350 86.3 30.1
Vinati Organics 1755 Buy 4,185 -17.7 -6.6 879 -46.3 -20.7 649 -48.3 -22.9
Chemicals-Specialty 62,437 -12.2 0.2 10,969 -18.7 3.2 7,178 -22.8 1.9

Exhibit 2: Comparative valuations

CMP EPS (INR) PE (x) PB (x) ROE (%)
Company Name INR Reco FY24E FY25E FY26E FY24E FY25E FY26E FY24E FY25E FY26E FY24E FY25E FY26E
Chemicals-Specialty 51.3 40.1 33.3 6.7 5.9 5.1 13.0 14.6 15.3
Alkyl Amines 2,701 Neutral 28.9 50.0 66.3 93.4 54.0 40.7 10.8 9.3 7.9 12.1 18.5 21.0
Atul 7,145 Neutral 106.2 154.1 182.8 67.3 46.4 39.1 4.3 3.9 3.6 6.5 8.8 9.7
Clean Science 1,591 Neutral 21.8 27.1 33.3 73.0 58.6 47.8 14.1 11.8 9.8 20.9 21.9 22.4
Deepak Nitrite 2,475 Neutral 64.6 78.6 92.7 38.3 31.5 26.7 6.9 5.8 4.9 19.7 20.1 19.9
Fine Organic 4,961 Sell 108.3 102.5 100.3 45.8 48.4 49.5 8.3 7.1 6.3 19.8 15.8 13.5
Galaxy Surfactants 2,775 Buy 95.3 111.5 129.9 29.1 24.9 21.4 4.6 4.0 3.5 16.7 17.1 17.4
Navin Fluorine 3,857 Neutral 56.1 83.4 106.3 68.8 46.2 36.3 7.9 6.9 6.0 12.1 15.9 17.6
NOCIL 274 Neutral 8.1 10.3 13.3 33.6 26.7 20.6 2.8 2.6 2.4 8.6 10.1 12.2
Vinati Organics 1,755 Buy 30.5 42.3 54.7 57.6 41.5 32.1 7.3 6.3 5.4 13.3 16.3 18.2

Exhibit 3: Relative performance – three-months (%) Exhibit 4: Relative performance – one-year (%)
Nifty Index MOFSL Chemicals Index Nifty Index MOFSL Chemicals Index
118 140

111 120

104 100

97 80

90 60
Sep-23 Oct-23 Nov-23 Dec-23 Dec-22 Mar-23 Jun-23 Sep-23 Dec-23

Source: Bloomberg, MOFSL Source: Bloomberg, MOFSL

Exhibit 5: Revenue snapshot for our coverage universe

Aggregate Revenue (INR b) 75.7 75.4
68.8 71.1 70.5
63.4 62.3 62.4
58.3 61.9
51.3 53.9
37.5 40.5 40.3 39.3 39.9 38.8 41.5 44.0
32.8 34.3 30.8
4QFY21
1QFY19

2QFY19

3QFY19

4QFY19

1QFY20

2QFY20

3QFY20

4QFY20

1QFY21

2QFY21

3QFY21

1QFY22

2QFY22

3QFY22

4QFY22

1QFY23

2QFY23

3QFY23

4QFY23

1QFY24

2QFY24

3QFY24

Source: Company, MOFSL

January 2024 78
 1QFY19 10.4% 1QFY19 15.5% 1QFY19 18.0% 1QFY19 42.2%

January 2024
2QFY19 11.4% 2QFY19 16.9% 2QFY19 19.3% 2QFY19 44.3%

3QFY19 10.7% 3QFY19 16.5% 3QFY19 19.0% 3QFY19 42.9%

4QFY19 11.0% 4QFY19 17.3% 4QFY19 19.9% 4QFY19 42.8%

1QFY20 13.9% 1QFY20 20.8% 1QFY20 23.5% 1QFY20 46.2%

2QFY20 19.1% 2QFY20 20.0% 2QFY20 23.0% 2QFY20 47.5%

3QFY20 15.5% 3QFY20 19.4% 3QFY20 22.6% 3QFY20 46.3%

4QFY20 21.2% 4QFY20 19.3% 4QFY20 22.7% 4QFY20 47.0%

1QFY21 17.3% 1QFY21 20.8% 1QFY21 25.1% 1QFY21 50.5%

2QFY21 17.4% 2QFY21 22.8% 2QFY21 26.0% Exhibit 7: EBITDAM snapshot for our coverage universe 2QFY21 50.2%

Exhibit 9: PAT margin snapshot for our coverage universe

Exhibit 8: EBIT margin snapshot for our coverage universe
Exhibit 6: Gross margin snapshot for our coverage universe

3QFY21 18.1% 3QFY21 22.3% 3QFY21 25.4% 3QFY21 48.5%

4QFY21 18.5% 4QFY21 22.2% 4QFY21 25.5% 4QFY21 48.3%

1QFY22 16.6% 1QFY22 21.0% 1QFY22 23.8% 1QFY22 45.6%

2QFY22 13.3% 2QFY22 16.8% 2QFY22 19.3% 2QFY22 40.6%

Aggregate EBITDAM (%)

Aggregate EBIT margin (%)

Aggregate PAT margin (%)

Aggregate Gross margin (%)

3QFY22 12.7% 3QFY22 15.8% 3QFY22 18.5% 3QFY22 41.7%

4QFY22 14.0% 4QFY22 16.9% 4QFY22 20.4% 4QFY22 42.9%

1QFY23 13.8% 1QFY23 16.9% 1QFY23 19.6% 1QFY23 41.6%

2QFY23 11.9% 2QFY23 14.5% 2QFY23 17.5% 2QFY23 39.4%

3QFY23 13.1% 3QFY23 15.2% 3QFY23 19.0% 3QFY23 41.3%

4QFY23 13.7% 4QFY23 16.7% 4QFY23 19.9% 4QFY23 42.4%

1QFY24 11.5% 1QFY24 13.6% 1QFY24 17.3% 1QFY24 40.8%

2QFY24 11.3% 2QFY24 12.7% 2QFY24 17.1% 2QFY24 41.0%

3QFY24 11.5% 3QFY24 13.0% 3QFY24 17.6% 3QFY24 41.9%

December 2023 Results Preview | Sector: Specialty Chemicals

79
Source: Company, MOFSL
Source: Company, MOFSL
Source: Company, MOFSL
Source: Company, MOFSL
 December 2023 Results Preview | Sector: Specialty Chemicals

Trend in key RM and product prices

Exhibit 10: Brent crude price down 3% QoQ Exhibit 11: Propylene (Korea) price up 5% QoQ
USD/MT Propylene Korea
Brent crude (USD/bbl)
160
1500
120
1200
80 900
815
77.4
40 600
0 300

Dec/…

Aug/…

Dec/…

Aug/…

Dec/…
Jun-22

Apr-23
Apr-22

Jun-23
Dec-21
Feb-22

Aug-22

Dec-22
Feb-23

Aug-23

Dec-23
Oct-22

Oct-23

Jun/22

Jun/23
Apr/22

Apr/23
Feb/22

Feb/23
Oct/22

Oct/23
Source: Reuters, MOFSL Source: Bloomberg, MOFSL

Exhibit 12: Butadiene (Korea) price up 23% QoQ Exhibit 13: Toluene (Korea) price down 11% QoQ
USD/MT Butadiene Korea USD/MT Toluene Korea

1700 1300

1400 1100

1100 900
839
800 945 700

500 500
Jun/22

Jun/23
Dec/21

Apr/22

Apr/23
Aug/22

Dec/22

Aug/23

Dec/23
Feb/22

Feb/23
Oct/22

Oct/23
Jun/22

Jun/23
Dec/21

Apr/22

Apr/23
Aug/22

Dec/22

Aug/23

Dec/23
Feb/22

Feb/23
Oct/22

Oct/23

Source: Bloomberg, MOFSL Source: Bloomberg, MOFSL

Exhibit 14: IPA price up 5% QoQ Exhibit 15: Aniline price down 4% QoQ
IPA (INR/kg) Aniline (INR/kg)
190 230

160 205
138
130 180
151.1
100 155

70 130
Apr-22
Jun-22

Apr-23
Jun-23
Dec-21

Aug-22

Dec-22

Aug-23

Dec-23
Feb-22

Feb-23
Oct-22

Oct-23
Jun-22

Jun-23
Aug-23
Dec-21

Apr-22

Aug-22

Dec-22

Apr-23

Dec-23
Feb-22

Feb-23
Oct-22

Oct-23

Source: IndiaPetroChem, MOFSL Source: IndiaPetroChem, MOFSL

January 2024 80
 December 2023 Results Preview | Sector: Specialty Chemicals

Exhibit 16: Acetic Acid price down 4% QoQ Exhibit 17: ACN price down 2% QoQ
Acetic Acid (INR/kg) ACN (INR/kg)
110 300

95 250

80 200

61.8 150 139

65

50 100

Jun-22

Jun-23
Dec-21

Apr-22

Apr-23
Aug-22

Dec-22

Aug-23

Dec-23
Feb-22

Feb-23
Oct-22

Oct-23
Jun-22

Jun-23

Dec-23
Dec-21

Apr-22

Aug-22

Dec-22

Apr-23

Aug-23
Oct-22
Feb-22

Feb-23

Oct-23
Source: IndiaPetroChem, MOFSL Source: IndiaPetroChem, MOFSL

Exhibit 18: Benzene price up 5% QoQ Exhibit 19: Phenol price down 2% QoQ
Benzene (INR/lit) Phenol (INR/kg)
140 170

145
120

120
100 89 100

95
80
70
60
Jun-23
Jun-22
Apr-22

Apr-23
Dec-21
Feb-22

Aug-22

Dec-22
Feb-23

Aug-23

Dec-23
Oct-22

Oct-23

Jun-22

Jun-23
Apr-22

Apr-23
Aug-22

Dec-22

Aug-23
Dec-21
Feb-22

Feb-23

Dec-23
Oct-22

Oct-23
Source: IndiaPetroChem, MOFSL Source: IndiaPetroChem, MOFSL

Exhibit 20: Acetone price up 11% QoQ Exhibit 21: Ammonia price down 50% QoQ
Acetone (INR/kg) Ammonia (INR/kg)
116 90

102 70
102
88 50

74 30 21

60 10
Jun-22

Jun-23
Apr-22

Apr-23
Aug-22

Aug-23
Dec-21
Feb-22

Dec-22
Feb-23

Dec-23
Oct-22

Oct-23
Apr-22
Jun-22

Apr-23
Jun-23

Dec-23
Dec-21
Feb-22

Aug-22

Dec-22
Feb-23

Aug-23
Oct-22

Oct-23

Source: IndiaPetroChem, MOFSL Source: IndiaPetroChem, MOFSL

January 2024 81
 December 2023 Results Preview | Sector: Specialty Chemicals

Exhibit 22: Blended Phenol and Acetone spread up 1% QoQ

Blended (Phenol+Acetone) spread (INR/kg) Long-term Average
126

112
95
98

84
82
70

Jul-22

Jul-23

Nov-23
Jun-22

Jun-23
Apr-22

May-22

Nov-22

Apr-23

May-23
Aug-22

Aug-23
Dec-21

Jan-22

Feb-22

Mar-22

Sep-22

Oct-22

Dec-22

Jan-23

Feb-23

Mar-23

Sep-23

Dec-23
Oct-23
Source: IndiaPetroChem, MOFSL

Exhibit 23: Caustic Soda Lye price up 8% QoQ Exhibit 24: Caustic Soda Flakes price up 3% QoQ
Caustic Soda Lye (INR/kg) Caustic Soda Flakes (INR/kg)
70 86

55 72

40 30 58

25 44 38

10 30 Apr-22

Jun-22

Apr-23

Jun-23
Dec-21

Feb-22

Aug-22

Dec-22

Feb-23

Aug-23

Dec-23
Oct-22

Oct-23
Apr-22
Jun-22

Apr-23
Jun-23
Aug-22
Dec-21
Feb-22

Dec-22
Feb-23

Aug-23

Dec-23
Oct-22

Oct-23

Source: IndiaPetroChem, MOFSL Source: IndiaPetroChem, MOFSL

Exhibit 25: Polycarbonate prices down 3% QoQ

China Chemicals SunSirs PC Polycarbonate (USD/mt) Long term average
4,000

3,250 2,983

2,500

1,750 2,194

1,000
Jul-22

Jul-23
Apr-22

May-22

Jun-22

Nov-22

Jan-23

Apr-23

May-23

Jun-23

Nov-23
Dec-21

Jan-22

Feb-22

Mar-22

Aug-22

Sep-22

Dec-22

Feb-23

Mar-23

Aug-23

Sep-23

Dec-23
Oct-22

Oct-23

Source: Bloomberg, MOFSL

January 2024 82
 December 2023 Results Preview | Sector: Specialty Chemicals

The tables below provide a snapshot of actual and estimated numbers for companies under the MOFSL coverage
universe. Highlighted columns indicate the quarter/financial year under review.

Alkyl Amines Neutral

CMP: INR2,701 | TP: INR2,490 (-8%) EPS CHANGE (%): FY24|25: -14|-10
 Expect revenue to remain flat on YoY basis with EBITDA  Expect EBITDA margin to contract 440bp YoY to 13.5% in
declining 11% YoY. 3QFY24
 Key monitorable: stabilization of the Ethylamines plant and  Watch out for updates on progress of four new products and
update on the weak ACN market conditions utilization of the ACN and various other plants
Standalone - Quarterly Snapshot (INR m)
Y/E March FY23 FY24
FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
Gross Sales 4,735 4,089 3,884 4,117 4,098 3,522 3,369 4,153 16,824 15,141
YoY Change (%) 20.8 17.3 3.1 -3.2 -13.5 -13.9 -13.3 0.9 9.1 -10.0
Gross Margin (%) 50.9% 49.0% 48.9% 46.4% 44.7% 45.7% 46.9% 46.8% 48.9% 46.0%
EBITDA 1,158 813 696 769 740 483 456 700 3,436 2,379
Margin (%) 24.5 19.9 17.9 18.7 18.1 13.7 13.5 16.9 20.4 15.7
Depreciation 118 112 107 116 122 125 128 131 452 506
Interest 8 11 7 11 9 17 13 12 37 50
Other Income 42 23 45 28 55 24 41 36 138 155
PBT before EO expense 1,075 714 626 671 664 364 357 593 3,085 1,978
PBT 1,075 714 626 671 664 364 357 593 3,085 1,978
Tax 256 189 169 185 166 92 90 150 799 498
Rate (%) 23.8 26.5 27.0 27.5 25.0 25.2 25.2 25.3 25.9 25.2
Reported PAT 819 524 457 486 498 272 267 443 2,286 1,480
YoY Change (%) 4.3 -3.1 -0.4 4.8 -39.2 -48.0 -41.6 -8.9 1.6 -35.3
Margin (%) 17.3 12.8 11.8 11.8 12.1 7.7 7.9 10.7 13.6 9.8

Atul Neutral
CMP: INR7,145 | TP: INR7,025 (-2%) EPS CHANGE (%): FY24|25: -22|-12
 Expect revenue to decline 13% YoY with EBITDA declining  EBITDA margin likely to contract 360bp YoY amid higher RM
36% YoY. costs.
 Expect revenue for Performance and Other chemicals to  Further delay in commissioning and ramp-up of its new
decline for the third consecutive quarter capacity expansions may hurt growth in FY25
Consolidated - Quarterly Snapshot (INR m)
Y/E March FY23 FY24
FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
Gross Sales 14,769 14,873 12,683 11,952 11,820 11,937 11,041 11,885 54,275 46,683
YoY Change (%) 36.7 19.0 -8.1 -12.8 -20.0 -19.7 -12.9 -0.6 6.8 -14.0
Gross Margin (%) 48.5% 47.1% 47.2% 45.8% 46.5% 44.1% 43.3% 46.0% 47.2% 45.0%
EBITDA 2,330 2,203 1,723 1,494 1,823 1,552 1,102 1,241 7,749 5,717
Margin (%) 15.8 14.8 13.6 12.5 15.4 13.0 10.0 10.4 14.3 12.2
Depreciation 473 491 504 511 519 540 543 546 1,978 2,148
Interest 16 19 22 22 20 19 21 20 79 80
Other Income 359 319 229 242 82 221 204 309 1,149 817
PBT before EO expense 2,200 2,011 1,425 1,203 1,365 1,215 742 985 6,840 4,306
PBT 2,200 2,011 1,425 1,203 1,365 1,215 742 985 6,840 4,306
Tax 577 544 394 297 364 325 198 264 1,812 1,084
Rate (%) 26.2 27.0 27.6 24.7 26.7 26.7 26.7 26.8 26.5 25.2
MI and Profit/Loss of Asso. Cos. 11 13 -3 16 20 22 22 23 38 86
Reported PAT 1,635 1,481 1,029 922 1,021 912 565 743 5,066 3,308
YoY change (%) 1.4 3.7 -32.1 -30.6 -37.6 -38.4 -45.1 -19.4 -15.2 -37.2
Margin (%) 11.1 10.0 8.1 7.7 8.6 7.6 5.1 6.3 9.2 6.7

January 2024 83
 December 2023 Results Preview | Sector: Specialty Chemicals

Clean Science Neutral

CMP: INR1,591 | TP: INR1,430 (-10%) EPS CHANGE (%): FY24|25: -1|-9
 Expect revenue and EBITDA to decline 16% and 17% YoY,  Expect EBITDAM to contract 70bp in 3QFY24
respectively
 Key monitorable: further details on the INR2b capex for new  Watch out for changing sales mix of flagship and non-
products announced previously flagship products
Consolidated - Quarterly Snapshot (INR m)
Y/E March FY23 FY24
FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
Gross Sales 2,341 2,475 2,374 2,169 1,881 1,811 1,995 2,176 9,358 7,863
YoY Change (%) 60.0 61.6 31.3 6.0 -19.6 -26.8 -16.0 0.4 36.6 -16.0
Gross Margin (%) 61.0% 62.5% 67.2% 70.5% 61.4% 65.9% 68.5% 62.4% 65.2% 64.5%
EBITDA 913 975 1,082 1,051 761 748 895 851 4,021 3,255
Margin (%) 39.0 39.4 45.6 48.5 40.5 41.3 44.9 39.1 43.0 41.4
Depreciation 85 87 89 101 108 111 114 116 361 449
Interest 0 0 1 1 1 3 2 2 2 8
Other Income 18 28 126 126 134 60 55 45 298 295
PBT before EO expense 847 916 1,118 1,075 787 695 834 778 3,956 3,093
PBT 847 916 1,118 1,075 787 695 834 778 3,956 3,093
Tax 218 237 280 270 198 173 210 198 1,005 779
Rate (%) 25.7 25.8 25.1 25.1 25.1 24.9 25.2 25.5 25.4 25.2
Reported PAT 629 679 838 805 589 522 624 579 2,952 2,315
YoY Change (%) 15.2 26.9 44.5 29.1 -6.3 -23.2 -25.5 -28.1 29.2 -21.6
Margin (%) 26.9 27.5 35.3 37.1 31.3 28.8 31.3 26.6 31.5 29.4

Deepak Nitrite Neutral

CMP: INR2,475 | TP: INR2,230 (-10%) EPS CHANGE (%): FY24|25: 0|-8
 Expect EBITDA margin of 19.3% in 3QFY24 (vs. 15.8% in  Updates on Oman subsidiary and on downstream products
3QFY23) due to low-cost raw material inventory. announced (MIBK, MIBC and Polycarbonate) to be keenly
monitored
 Key monitorable: Update on various capex under  Key risk: substantial margin fluctuations due to the highly
implementation commoditized nature of products
Consolidated - Quarterly Snapshot (INR m)
Y/E March FY23 FY24
FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
Gross Sales 20,580 19,617 19,911 19,614 17,683 17,781 18,467 20,706 79,721 74,637
YoY Change (%) 34.8 16.7 15.6 4.8 -14.1 -9.4 -7.3 5.6 17.2 -6.4
Gross Margin (%) 33.9% 30.2% 32.8% 34.8% 30.8% 34.4% 36.7% 34.2% 32.9% 34.1%
EBITDA 3,560 2,709 3,146 3,480 2,098 3,023 3,571 3,901 12,894 12,592
Margin (%) 17.3 13.8 15.8 17.7 11.9 17.0 19.3 18.8 16.2 16.9
Depreciation 419 424 411 409 381 394 411 427 1,663 1,613
Interest 86 59 58 45 18 27 34 56 248 135
Other Income 96 120 134 126 319 170 216 228 476 933
PBT 3,151 2,346 2,810 3,152 2,017 2,772 3,342 3,646 11,459 11,776
Tax 805 601 720 813 518 721 841 884 2,939 2,964
Rate (%) 25.5 25.6 25.6 25.8 25.7 26.0 25.2 24.2 25.6 25.2
Reported PAT 2,346 1,745 2,091 2,339 1,499 2,051 2,500 2,762 8,520 8,812
YoY Change (%) -22.5 -31.4 -13.8 -12.5 -36.1 17.5 19.6 18.1 -20.1 3.4
Margin (%) 11.4 8.9 10.5 11.9 8.5 11.5 13.5 13.3 10.7 11.8

January 2024 84
 December 2023 Results Preview | Sector: Specialty Chemicals

Fine Organic Sell

CMP: INR4,961 | TP: INR3,530 (-29%) EPS CHANGE (%): FY24|25: -8|-4
 Expect revenue to fall 41% YoY and EBITDA margin to  The geopolitical crisis and other global macro headwinds
contract 270bp YoY to 20.6% in 3QFY24 would continue to have an adverse impact on the company
 Key monitorable: update on the progress of JV to be set up  Key risk: Delay in the addition of new capacities could deter
in Thailand and new land acquisitions growth
Standalone - Quarterly Snapshot (INR m)
Y/E March FY23 FY24
FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
Gross Sales 7,526 8,281 7,499 6,986 5,321 4,717 4,451 4,449 30,291 18,938
YoY Change (%) 109.1 92.8 60.1 16.3 -29.3 -43.0 -40.6 -36.3 63.0 -37.5
Gross Margin (%) 41.3% 38.2% 35.1% 39.1% 42.9% 41.9% 41.5% 39.4% 38.4% 41.5%
EBITDA 2,056 2,138 1,747 1,873 1,519 1,044 917 873 7,813 4,352
Margin (%) 27.3 25.8 23.3 26.8 28.5 22.1 20.6 19.6 25.8 23.0
Depreciation 111 115 123 130 117 144 150 155 479 567
Interest 11 13 11 9 6 7 8 9 44 31
Other Income 166 193 152 130 145 172 179 188 640 683
PBT 2,099 2,203 1,764 1,863 1,540 1,064 938 896 7,930 4,438
Tax 526 563 452 483 397 270 237 213 2,024 1,117
Rate (%) 25.1 25.6 25.6 25.9 25.8 25.4 25.2 23.7 25.5 25.2
Reported PAT 1,573 1,640 1,313 1,381 1,142 794 702 683 5,906 3,321
YoY Change (%) 350.2 228.2 135.6 25.5 -27.4 -51.6 -46.5 -50.5 135.6 -43.8
Margin (%) 20.9 19.8 17.5 19.8 21.5 16.8 15.8 15.4 19.5 17.5

Galaxy Surfactants Buy

CMP: INR2,775 | TP: INR3,760 (+35%) EPS CHANGE (%): FY24|25: -2|-1
 Expect revenue to decline 10% YoY due to a decline in  Expect EBITDA margin to be at 13.8% with absolute
realizations. EBITDA/kg declining YoY due to changing product mix
 Key monitorable: updates on demand recovery in AMET and  Impact of the ongoing Red Sea issue on sales volume would
RoW regions also be keenly monitored
Consolidated - Quarterly Snapshot (INR m)
Y/E March FY23 FY24
FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
Gross Sales 11,589 12,365 10,803 9,745 9,418 9,831 9,691 11,865 44,501 40,806
YoY Change (%) 40.2 40.9 16.3 -7.5 -18.7 -20.5 -10.3 21.8 20.7 -8.3
Gross Margin (%) 30.8% 27.2% 31.6% 32.4% 32.4% 31.5% 32.5% 30.9% 30.3% 31.8%
EBITDA 1,480 1,317 1,541 1,345 1,232 1,249 1,336 1,542 5,683 5,359
Margin (%) 12.8 10.7 14.3 13.8 13.1 12.7 13.8 13.0 12.8 13.1
Depreciation 189 205 216 225 238 247 255 264 835 1,003
Interest 44 56 56 61 57 54 59 65 217 234
Other Income -20 11 37 70 25 27 29 31 99 112
PBT 1,227 1,067 1,307 1,129 962 975 1,053 1,244 4,730 4,233
Tax 223 228 245 224 210 201 192 252 920 855
Rate (%) 18.2 21.4 18.7 19.8 21.8 20.6 18.3 20.3 19.4 20.2
Reported PAT 1,004 839 1,062 905 752 774 860 992 3,810 3,378
YoY Change (%) 30.7 100.0 132.8 -8.0 -25.1 -7.7 -19.0 9.6 45.0 -11.3
Margin (%) 8.7 6.8 9.8 9.3 8.0 7.9 8.9 8.4 8.6 8.3

January 2024 85
 December 2023 Results Preview | Sector: Specialty Chemicals

Navin Fluorine Neutral

CMP: INR3,857 | TP: INR3,520 (-9%) EPS CHANGE (%): FY24|25: -17|-16
 Modeled revenue of INR5.5b on the back of recovery in the  EBITDA margin to expand 200bp QoQ to 22.8% on the back
spec chem segment after deferment of orders from 2Q to of improvement in demand in HPP.
3Q.
 Key monitorable: progress of the upcoming AHF capacity  Update on launch of five new molecules at Dahej plant to be
announced in addition to the already existing capacity. keenly monitored.
Consolidated - Quarterly Snapshot (INR m)
Y/E March FY23 FY24
FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
Gross Sales 3,975 4,192 5,636 6,971 4,912 4,718 5,557 6,401 20,774 21,596
YoY Change (%) 21.7 23.7 48.7 70.5 23.6 12.5 -1.4 -8.2 42.9 4.0
Gross Margin (%) 54.1% 56.2% 56.3% 59.3% 58.7% 57.2% 57.3% 57.7% 56.9% 57.8%
EBITDA 991 938 1,556 2,018 1,142 983 1,268 1,666 5,503 5,068
Margin (%) 24.9 22.4 27.6 28.9 23.3 20.8 22.8 26.0 26.5 23.5
Depreciation 124 177 250 76 213 243 251 258 626 964
Interest 3 40 92 140 194 200 209 217 275 821
Other Income 109 109 99 40 83 231 76 42 357 432
PBT before EO expense 974 831 1,313 1,842 818 772 883 1,233 4,959 3,715
PBT 974 831 1,313 1,842 818 772 883 1,233 4,959 3,715
Tax 229 252 247 478 202 166 222 344 1,207 935
Rate (%) 23.5 30.4 18.8 26.0 24.8 21.5 25.2 27.9 24.3 25.2
Reported PAT 745 578 1,066 1,364 615 606 661 889 3,752 2,780
Adj. PAT 745 578 1,066 1,364 615 606 661 889 3,752 2,780
YoY Change (%) 33.2 -8.6 54.9 81.5 -17.4 4.8 -38.0 -34.8 42.6 -25.9
Margin (%) 18.7 13.8 18.9 19.6 12.5 12.8 11.9 13.9 18.1 12.9

NOCIL Neutral
CMP: INR274 | TP: INR250 (-9%) EPS CHANGE (%): FY24|25: +8|+0
 Expect revenue to be up 13% YoY at INR3.7b led by higher  EBITDAM to improve 350bp YoY to 14.8% in 3QFY24;
volumes. absolute EBITDA/kg to also improve YoY
 Key monitorable: new capex announcements in the specialty  There is a probable risk of higher dumping from China as
segment and an update on debottlenecking ADD was rejected by the Government of India in 4QFY22
Standalone - Quarterly Earning Model (INR m)
Y/E March FY23 FY24
FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
Gross Sales 5,089 3,892 3,257 3,927 3,967 3,509 3,683 4,348 16,166 15,506
YoY Change (%) 47.7 3.8 -16.2 -15.1 -22.1 -9.9 13.1 10.7 2.9 -4.1
Gross Margin (%) 46.4% 47.1% 46.1% 40.6% 42.7% 43.4% 44.5% 43.8% 45.1% 43.6%
EBITDA 1,019 615 367 490 544 441 546 601 2,490 2,131
Margin (%) 20.0 15.8 11.3 12.5 13.7 12.6 14.8 13.8 15.4 13.7
Depreciation 134 136 138 136 126 127 129 131 544 513
Interest 3 3 3 3 4 3 3 2 12 12
Other Income 3 12 26 32 48 49 53 58 73 208
PBT before EO expense 885 487 251 384 461 360 467 526 2,007 1,814
PBT 885 487 251 384 461 360 467 526 2,007 1,814
Tax 229 128 64 100 125 91 118 123 520 457
Rate (%) 25.8 26.2 25.4 26.1 27.2 25.3 25.2 23.4 25.9 25.2
Reported PAT 656 359 188 284 336 269 350 403 1,487 1,357
YoY Change (%) 39.4 17.7 -37.2 -58.6 -48.8 -25.2 86.3 42.0 -15.5 -8.7
Margin (%) 12.9 9.2 5.8 7.2 8.5 7.7 9.5 9.3 9.2 8.8
Operational parameters
Total Volume Sold (mt) 15,289 11,846 10,935 13,770 13,466 12,859 13,089 13,204 51,840 52,618
Implied Realization (INR/kg) 333 329 298 285 295 273 281 329 312 295
EBITDA (INR/kg) 66.6 51.9 33.6 35.6 40.4 34.3 41.7 45.5 48.0 40.5

January 2024 86
 December 2023 Results Preview | Sector: Specialty Chemicals

Vinati Organics Buy

CMP: INR1,755 | TP: INR2,065 (+18%) EPS CHANGE (%): FY24|25: -14|-18
 Expect revenue to decline 18% YoY to INR4.2b due to weak  EBITDA margin to be at 21% with gross margin at 44.4% in
ATBS demand led by falling oil rig count 3QFY24
 Key driver: ramp-up of Antioxidants plant to aid sales growth  Watch out for capex updates (on MEHQ and Guaiacol) and
in FY24E and FY25E other new product announcements
Standalone - Quarterly Earning Model (INR m)
Y/E March FY23 FY24
FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
Gross Sales 5,063 5,663 5,087 5,034 4,310 4,481 4,185 4,765 20,847 17,742
YoY Change (%) 31.0 51.4 37.9 3.6 -14.9 -20.9 -17.7 -5.3 29.0 -14.9
Gross Margin (%) 45.5% 45.0% 51.6% 50.3% 47.6% 46.7% 44.4% 47.1% 48.0% 46.5%
EBITDA 1,309 1,485 1,638 1,523 1,090 1,108 879 1,099 5,954 4,176
Margin (%) 25.8 26.2 32.2 30.3 25.3 24.7 21.0 23.1 28.6 23.5
Depreciation 128 130 130 130 132 137 140 145 519 554
Interest 5 0 0 1 3 3 2 2 6 9
Other Income 187 200 168 170 153 162 130 131 724 577
PBT before EO expense 1,363 1,554 1,675 1,561 1,109 1,130 866 1,084 6,153 4,189
PBT 1,363 1,554 1,675 1,561 1,109 1,130 866 1,084 6,153 4,189
Tax 351 394 421 407 276 289 217 272 1,573 1,054
Rate (%) 25.7 25.3 25.1 26.1 24.9 25.5 25.1 25.1 25.6 25.2
Reported PAT 1,012 1,160 1,254 1,154 832 842 649 812 4,580 3,135
YoY Change (%) 25.0 42.6 50.6 14.1 -17.7 -27.4 -48.3 -29.6 32.1 -31.6
Margin (%) 20.0 20.5 24.7 22.9 19.3 18.8 15.5 17.0 22.0 17.7

January 2024 87
 December 2023 Results Preview | Sector: Consumer

Consumer
Asian Paints Steady demand trend; operating print looks healthy
Britannia Industries
Demand trends in 3QFY24 for our coverage universe remained similar to those seen
Colgate-Palmolive India in the previous six months. Urban consumption is driving overall demand, while a
Dabur India rural recovery has been delayed. Companies are passing on the benefits of lower
Emami raw material prices to consumers to drive volume. Generally, it takes three to four
Godrej Consumer Products quarters to start seeing a volume recovery after price cuts (all eyes on recovery post
Hindustan Unilever 4Q). Accordingly, we believe the volume recovery is in the interim phase.
Indigo Paints
Meanwhile, value growth is affected by price cuts. Rural consumption is lagging due
to macro factors like below-average rainfall, export restrictions on certain
ITC
agricultural products, and weak rural income. Consumption at the mass level (key
Jyothy Laboratories
volume contributor) remained tepid, while consumption at the premium end stayed
Marico healthy. There has been a surge in local competition (typical trend in price cuts), and
Nestle India commodity-sensitive categories (laundry, home care, soaps, etc.) are seeing more
Page Industries pressure. Festive demand-led categories are expected to do well due to the shift in
Pidilite Industries the festive season to 3Q vs. 2Q last year.
P&G Hygiene and Healthcare The operating performance is expected to be healthy as the soft commodity basket
Tata Consumer Products (despite price cuts) has been aiding the gross margin expansion. A part of the GM
United Breweries expansion is being offset by higher A&P spending (various steps taken to accelerate
United Spirits volume growth), yet EBITDA margin is expected to expand YoY. The 19 companies
Varun Beverages under our coverage are expected to deliver growth of ~7% in revenue, ~11% in
EBITDA, and 10% in PAT in 3QFY24. The four-year and five-year sales/EBITDA/PAT
CAGRs stand at 10.4%/10.4%/11.4% and 11.2%/10.3%/7.2%. In terms of volume,
our FMCG universe is likely to post mid to low single-digit growth in 3QFY24, while
paints and adhesive firms are expected to report high single-digit to double-digit
volume growth. Cigarette is seeing a moderation in demand and is expected to
deliver mid-single-digit volume growth.
Delays in rural recovery, some green shoots visible
Rural demand remains weak despite a moderation in inflation and various measures
taken by the government. The recent surge in food inflation and erratic weather
conditions have further delayed the recovery. Some companies are seeing green
shoots for rural recovery, and we expect the recovery to be gradual after 4Q. Among
large companies, APNT is expected to report 10% YoY sales growth, 13% volume
growth in domestic decorative, and EBITDA/PAT growth of 14%/13%. For HUVR, we
estimate sales/EBITDA/adj PAT growth of 4%/10%/9% YoY. ITC is likely to post 6%
YoY sales growth, with EBITDA/adj. PAT growth of 3%/1% in 3QFY24. In the realm of
cigarettes, we expect ~2% volume growth on a high base, considering the four-year
volume CAGR at ~6%. UBBL, VBL, JYL, INDIGOPN, and others are poised to report
strong numbers in 3QFY24, with EBITDA and PAT growth exceeding 25% YoY each.
Oil, VAM and tea prices cooling off; other agri prices up sequentially
As we mentioned in our commodity note in Dec'23, crude price has been seeing a
downtrend and dropped below USD75/bbl during 3QFY24 due to sluggish demand,
economic slowdown in China, and concerns over surplus supply. VAM prices also
decreased sharply by 23.6% YoY/11.5% QoQ to USD811/t. Titanium dioxide (TiO2)
prices in China increased by 6.5% YoY/4.6% QoQ to CNY16,483/MT. Domestic gold
prices increased 16.4% YoY and 3% QoQ, and are currently trading at INR63,083 per
10gm. Agri commodity prices have been rising due to the anticipation of low supply
Pratik Bipinchandra Prajapati – Research Analyst (pratik.prajapati@motilaloswal.com)
Research Analyst: Pratik Bipinchandra Prajapati (pratik.prajapati@motilaloswal.com) | Tanu Jindal (Tanu.Jindal@MotilalOswal.com)
 December 2023 Results Preview | Sector: Consumer

as production was disrupted by bad weather. Notably, prices of wheat, coffee,

barley, sugar, and maize increased QoQ, while prices of other agricultural
commodities, such as tea and menthe oil, softened. Sugar prices rose 10.8% YoY and
5.8% QoQ to INR3,900/quintal. Palm oil prices declined 6.4% YoY/3.3% QoQ to
MYR3,716/MT. Overall, the commodity cost basket declined 2.6% YoY but stabilized
QoQ. The festive season boosted growth in e-commerce, modern trade, and urban
markets. In contrast, rural demand has been subdued mainly for branded
commodities due to competition from smaller and regional players. Persistently low
demand is causing supply chain congestion, leading to an increase in inventory days,
with stocks accumulating at distributors. Companies cut prices to pass on the
benefits of lower input costs to consumers and to recover market share from local
players. Eight out of nineteen stocks under our coverage are likely to report flat or
lower EBITDA margin YoY. Conversely, paints, adhesive and beer companies are set
to see a significant margin improvement of ~450-700bp due to a correction in
commodity prices. Meanwhile, HUL, CLGT, MRCO, NEST, UNSP, and VBL are
anticipated to report operating margin improvements in the range of 100-200bp
YoY.
Top picks
ITC: The cigarette business continues to deliver volume growth and market share
gains in the softening of competition from illicit trade. The FMCG - Others segment
has also delivered strong growth across markets and product lines, and as input
prices decline, we anticipate an expansion in margins too.
TATACONS: We are bullish on TATACONS thanks to its two-pronged growth
strategy: 1) focusing on new growth engines such as Tata Sampann, NourishCo, Tata
Soulful, and the ready to-eat/ready-to-consume business (Tata Smart Foodz); and 2)
rapidly expanding its distribution network while enhancing digital capabilities
throughout the supply chain. This dual approach is poised to drive the next leg of
growth for the company.
Exhibit 1: Overall performance
SALES (INR M) EBDITA (INR M) NET PROFIT (INR M)
CMP
RECO Var Var Var Var Var Var
Sector (INR) Dec-23 Dec-23 Dec-23
% YoY % QoQ % YoY % QoQ % YoY % QoQ
Asian Paints 3395 Neutral 94,831 9.8 11.8 18,351 13.9 6.9 12,343 12.5 0.2
Britannia 5316 Neutral 43,899 4.6 -1.0 8,444 3.3 -3.2 5,699 2.6 -3.0
Colgate 2482 Neutral 13,744 6.4 -6.6 4,230 17.0 -12.3 2,882 18.5 -15.2
Dabur 558 Buy 32,745 7.6 2.2 6,803 11.5 -2.4 5,271 10.2 -6.2
Emami 573 Buy 10,132 3.1 17.1 3,050 3.6 30.5 2,754 7.4 35.4
Godrej Consumer 1145 Buy 36,349 1.0 0.9 7,924 3.2 9.5 5,598 1.1 25.7
Hind. Unilever 2656 Buy 1,58,971 4.4 4.1 39,045 10.4 5.7 28,195 9.2 5.7
Indigo Paints 1492 Buy 3,406 21.1 22.1 576 41.9 36.6 357 35.9 40.8
ITC 467 Buy 1,71,560 5.7 3.7 63,946 2.8 5.8 50,733 0.8 3.0
Jyothy Labs 483 Neutral 6,788 10.8 -7.3 1,242 47.3 -8.2 914 35.6 -12.1
Marico 542 Buy 24,206 -2.0 -2.2 5,059 10.9 1.8 3,602 9.8 2.1
Nestle 2737 Neutral 47,250 11.0 -6.2 11,387 16.6 -7.3 7,578 19.9 -5.9
P&G Hygiene 17373 Neutral 12,398 9.0 8.9 3,200 10.2 12.3 2,380 14.5 13.0
Page Industries 38771 Neutral 13,211 8.0 17.4 2,695 39.8 15.4 1,779 43.8 18.4
Pidilite Inds. 2697 Neutral 32,314 7.8 5.1 7,506 51.4 10.4 5,028 64.2 9.3
Tata Consumer 1080 Buy 37,724 8.6 1.0 5,214 14.9 -2.9 3,407 16.4 -2.4
United Breweries 1792 Sell 18,140 12.6 -3.9 2,135 178.5 15.6 1,243 449.2 15.5
United Spirits 1106 Neutral 29,340 5.5 2.4 4,254 15.7 -9.5 2,646 18.4 -16.9
Varun Beverages 1242 Buy 26,737 20.8 -30.9 4,106 33.5 -53.5 1,363 82.3 -72.8
Consumer 8,13,745 6.7 1.6 1,99,167 10.9 1.4 1,43,773 9.7 0.2

January 2024 89
 December 2023 Results Preview | Sector: Consumer

Exhibit 2: Expect most of the companies to post low single-digit volume growth in 3QFY24
Quarter ending (gr. %) 3QFY21 4QFY21 1QFY22 2QFY22 3QFY22 4QFY22 1QFY23 2QFY23 3QFY23 4QFY23 1QFY24 2QFY24 3QFY24E
Asian Paints (Dom. Deco.) 33.0 48.0 106.0 34.0 10.0 8.0 37.0 10.0 0.0 16.0 10.0 6.0 13.0
Britannia (Biscuits) 3.0 8.0 1.0 5.0 6.0 4.0 (2.0) 4.0 2.0 3.0 0.0 3.0 3.0
Colgate (Toothpaste) 6.0 16.0 8.0 4.0 1.0 (4.0) (1.0) 0.0 -2.0 0.0 5.0 -1.0 2.0
Dabur 18.1 25.4 34.4 10.0 2.0 2.0 5.0 2.0 -3.0 1.0 3.0 3.0 4.0
Emami 13.0 39.0 38.0 6.2 0.0 0.0 9.6 -1 -3.9 2.0 3.0 2.0 0.0
Hindustan Unilever 17.0 31.0 9.0 4.0 2.0 0.0 6.0 4.0 5.0 4.0 3.0 2.0 2.0
ITC (Cigarettes) (7.0) 7.0 31.0 9.0 12.5 9.0 26.0 21.0 15.0 12.0 8.0 4.0 2.0
Marico (Dom.) 15.0 25.0 21.0 8.0 0.0 1.0 (6.0) 3.0 4.0 5.0 3.0 3.0 3.0
Pidilite 22.0 45.3 105.0 24.5 9.0 20.2 44.0 1.0 1.0 7.0 12.0 8.0 10.0
Source: Company, MOFSL
Exhibit 3: Crude prices dipped 5% YoY/ 3% QoQ in Dec’23 Exhibit 2: TiO2 prices fell 7.0% YoY/5.0% QoQ in Dec’23
Brent Crude Index TiO2 price (INR/kg)

353
274
85
51
Aug-19

Aug-20

Aug-21

Aug-22

Aug-23
Apr-19

Dec-22
Dec-18

Dec-19
Apr-20

Dec-20
Apr-21

Dec-21
Apr-22

Apr-23

Dec-23

Mar-19

Mar-20

Mar-21

Mar-22

Mar-23
Jun-22
Jun-19

Jun-20

Jun-21

Jun-23
Dec-19
Dec-18

Dec-20

Dec-21

Dec-22

Dec-23
Sep-19

Sep-20

Sep-21

Sep-22

Sep-23
Source: Bloomberg, MOFSL Source: Bloomberg, MOFSL

Exhibit 4: Copra prices fell 2.3% YoY and rose 3.9% QoQ in
Exhibit 3: VAM prices dipped 23.6% YoY/11.5% QoQ in Dec’23 Oct’23

VAM prices (USD/MT) Cochin/Kochi Coconut Oil (INR/100kg)

14,679

1,023
811 12,829
Aug-23
Dec-18

Aug-19
Dec-19

Aug-20
Dec-20

Aug-21
Dec-21

Aug-22
Dec-22

Dec-23
Apr-21
Apr-19

Apr-20

Apr-22

Apr-23

Oct-19
Oct-18

Oct-20

Jun-21
Oct-21

Oct-22

Oct-23
Jun-19

Jun-20

Jun-22

Jun-23
Feb-19

Feb-20

Feb-21

Feb-22

Feb-23

Source: Bloomberg, MOFSL Source: Company, MOFSL

Exhibit 5: HDPE prices dropped 9.4% YoY/6.3% QoQ in Oct’23 Exhibit 6: LLP prices rose 9.7% YoY/9.6% QoQ in Oct’23

HDPE (INR/kg) Liquid Paraffin (INR/lt)

84

110 118 50
Oct-23
Oct-18

Jun-19
Oct-19

Oct-20

Oct-21

Oct-22

Oct-23

Oct-18

Oct-19

Oct-20

Oct-21

Oct-22
Jun-20

Jun-21

Jun-22

Jun-23

Jun-19

Jun-20

Jun-21

Jun-22

Jun-23
Feb-23

Feb-20
Feb-19

Feb-20

Feb-21

Feb-22

Feb-19

Feb-21

Feb-22

Feb-23

Source: Company, MOFSL Source: Company, MOFSL

January 2024 90
 December 2023 Results Preview | Sector: Consumer

Exhibit 8: Malaysian palm oil prices fell 6.4% YoY/3.3% QoQ

Exhibit 7: PFAD prices flat on YoY/and fell 7.3% QoQ in Sep’23 in Dec’23
Palm Fatty Acid (USD/MT) Palm Oil (MYR/MT)

771 3,698.0
446.9 2,023.5

Mar-19

Mar-20

Mar-21

Mar-22

Mar-23
Jun-19

Jun-20

Jun-21

Jun-22

Jun-23
Dec-18

Dec-19

Dec-20

Dec-21

Dec-22

Dec-23
Sep-19

Sep-20

Sep-21

Sep-22

Sep-23
Jan-19

Jan-20

Jan-21

Jan-22

Jan-23
Sep-18

Sep-19

Sep-20

Sep-21

Sep-22

Sep-23
May-21
May-19

May-20

May-22

May-23
Source: Bloomberg, MOFSL Source: Bloomberg, MOFSL

Exhibit 9: Mentha oil prices fell 13.5% YoY/3.2% QoQ in Exhibit 10: Gold prices rose 16.4% YoY, but fell 3.0% QoQ in
Dec’23 Dec’23
Mentha Oil (INR/kg) MCX Gold (INR/10gm)
1,775
62,197

1,015
32,396
Aug-19

Aug-20

Aug-21

Aug-22

Aug-23
Aug-21

Aug-22
Aug-19

Aug-20

Aug-23

Dec-18

Dec-19
Apr-20

Dec-20

Dec-21

Dec-22

Dec-23
Apr-19

Apr-21

Apr-22

Apr-23
Dec-18
Apr-19

Dec-19
Apr-20

Dec-20
Apr-21

Dec-21
Apr-22

Dec-22
Apr-23

Dec-23

Source: Bloomberg, MOFSL Source: Bloomberg, MOFSL

Exhibit 11: Wheat prices flat YoY and up 6.4% QoQ in Dec’23 Exhibit 12: Yarn prices down 18.1% YoY/flat QoQ in Dec’23
Wheat (INR/quintal) NNS Cotton Yarn Hosiery Yarn Carded 40 price
INR/kg India

2,659

250
2,044
208
Aug-19

Aug-20

Aug-21

Aug-22

Aug-23
Apr-19

Apr-20

Apr-21

Apr-22

Apr-23
Dec-18

Dec-19

Dec-20

Dec-21

Dec-22

Dec-23

Aug-19

Aug-20

Aug-21

Aug-22

Aug-23
Dec-19
Dec-18
Apr-19

Apr-20

Dec-20
Apr-21

Dec-21
Apr-22

Dec-22
Apr-23

Dec-23

Source: Bloomberg, MOFSL Source: Bloomberg, MOFSL

January 2024 91
 December 2023 Results Preview | Sector: Consumer

Exhibit 13: Comparative valuation

CMP EPS (INR) PE (x) PB (x) ROE (%)
Company Name INR Reco FY24E FY25E FY26E FY24E FY25E FY26E FY24E FY25E FY26E FY24E FY25E FY26E
Consumer 50.2 44.6 40.0 13.1 12.4 11.6 26.1 27.8 29.2
Asian Paints 3,395 Neutral 56.0 62.2 70.8 60.6 54.6 48.0 19.0 17.0 14.8 32.4 32.9 33.0
Britannia 5,316 Neutral 88.5 98.2 111.2 60.1 54.2 47.8 35.8 32.6 29.6 60.0 63.0 64.9
Colgate 2,482 Neutral 45.9 48.7 51.2 54.0 51.0 48.5 39.3 39.3 39.3 72.8 77.2 81.1
Dabur 558 Buy 11.3 12.8 14.6 49.4 43.7 38.2 9.8 9.0 8.2 21.0 21.5 22.5
Emami 573 Buy 19.5 21.6 24.6 29.4 26.5 23.3 10.5 9.4 8.2 36.3 37.3 37.7
Godrej Consumer 1,145 Buy 18.6 22.9 26.4 61.6 50.0 43.4 8.0 7.6 7.2 13.4 15.7 17.1
Hind. Unilever 2,656 Buy 46.0 51.4 56.2 57.7 51.7 47.3 12.9 13.6 14.3 21.9 25.7 29.5
Indigo Paints 1,492 Buy 30.4 40.7 49.0 49.1 36.6 30.5 8.0 6.8 5.8 17.3 20.0 20.6
ITC 467 Buy 16.3 18.4 20.0 28.7 25.5 23.3 8.2 7.8 7.4 29.2 31.3 32.4
Jyothy Labs 483 Neutral 10.0 11.4 12.8 48.4 42.3 37.9 10.2 9.3 8.3 22.4 23.0 23.1
Marico 542 Buy 11.4 12.6 13.9 47.7 43.2 39.1 16.3 15.3 14.5 36.2 36.6 38.0
Nestle 2,737 Neutral 29.8 36.0 40.3 91.7 76.0 67.8 90.2 75.3 65.7 142.6 108.0 103.4
P&G Hygiene 17,373 Neutral 251.9 293.7 339.2 69.0 59.2 51.2 54.9 46.3 39.2 82.9 85.0 82.9
Page Industries 38,771 Neutral 549.0 625.9 739.8 70.6 61.9 52.4 26.7 22.8 19.4 37.9 36.8 37.0
Pidilite Inds. 2,697 Neutral 36.5 43.4 49.5 74.0 62.2 54.4 16.6 14.5 12.7 24.0 24.9 24.9
Tata Consumer 1,080 Buy 14.4 19.3 21.5 75.2 56.0 50.2 5.8 5.3 4.9 8.1 9.7 10.1
United Breweries 1,792 Sell 19.2 26.7 34.9 93 67 51.3 11.2 10.3 9.3 12.4 15.9 19.0
United Spirits 1,106 Neutral 14.8 17.7 20.5 75 62 53.9 11.9 12.2 12.1 15.9 19.5 22.5
Varun Beverages 1,242 Buy 15.9 19.8 24.4 78.3 62.7 50.9 23.3 17.4 13.3 34.2 31.8 29.6

Exhibit 14: Relative performance – three months (%) Exhibit 15: One-year relative performance (%)
Nifty Index MOFSL Consumer Index Nifty Index MOFSL Consumer Index
114 125

108 115

102 105

96 95

90 85
Sep-23 Oct-23 Nov-23 Dec-23 Dec-22 Mar-23 Jun-23 Sep-23 Dec-23

Source: MOFSL, Company Source: MOFSL, Company

January 2024 92
 December 2023 Results Preview | Sector: Consumer

The tables below provide a snapshot of actual and estimated numbers for companies under the MOFSL Coverage
Universe. Highlighted columns indicate the quarter/financial year under review.

Asian Paints Neutral

CMP: INR3,395 | TP: INR3,340 (-2%) EPS CHANGE (%): FY24|25: 2.7|0.9
 We expect 13% YoY volume growth in 3QFY24  TiO2 to decline 7% YoY/5% QoQ in 3QFY24
 We expect gross margin to expand 370bp YoY  Expect demand to rebound due to the festive season, low
base, the wedding season and upsurge in real estate
Quarterly Performance (Consol.) (INR m)
Y/E March FY23 FY24E
FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
Est. Dom. Deco. Vol. growth (%) 37.0 10.0 0.0 16.0 10.0 6.0 13.0 15.0 14.0 11.0
Net Sales 86,069 84,576 86,367 87,873 91,823 84,786 94,831 97,827 3,44,886 3,69,267
Change (%) 54.1 19.2 1.3 11.3 6.7 0.2 9.8 11.3 18.5 7.1
Gross Profit 32,450 30,219 33,310 37,341 39,419 36,771 40,114 41,952 1,33,321 1,58,256
Gross Margin (%) 37.7 35.7 38.6 42.5 42.9 43.4 42.3 42.9 38.7 42.9
EBITDA 15,560 12,277 16,114 18,648 21,213 17,162 18,351 19,708 62,598 76,434
Margin (%) 18.1 14.5 18.7 21.2 23.1 20.2 19.4 20.1 18.2 20.7
Change (%) 70.3 35.7 4.5 29.2 36.3 39.8 13.9 5.7 30.3 22.1
Interest 288 354 414 389 458 509 350 390 1,445 1,707
Depreciation 2,081 2,157 2,141 2,202 1,983 2,087 2,280 2,171 8,580 8,521
Other Income 990 955 866 1,055 1,971 1,652 1,050 1,191 3,865 5,864
PBT 14,181 10,721 14,426 17,112 20,743 16,218 16,771 18,338 56,438 72,070
3Tax 3,706 2,903 3,811 4,514 5,301 4,186 4,428 4,680 14,935 18,594
Effective Tax Rate (%) 26.1 27.1 26.4 26.4 25.6 25.8 26.4 25.5 26.5 25.8
Adjusted PAT 10,602 8,038 10,971 12,831 15,749 12,324 12,343 13,275 42,442 53,691
Change (%) 84.6 32.8 6.4 29.6 48.5 53.3 12.5 3.5 32.6 26.5
E: MOFSL Estimates

Britannia Industries Neutral

CMP: INR5,316 | TP: INR 5,240 (-2%) EPS CHANGE (%): FY24|25: -0.1|-5.4
 We expect 3% volume growth in the base business in  The upward surge seen in raw material prices in anticipation
3QFY24. of low supply.
 We expect gross margin and EBITDA margin decline of 70bp  Likely to implement price reductions to remain competitive.
and 20bp YoY on high base.
Consol. Quarterly Performance (INR m)
Y/E March FY23 FY24
FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
Base business volume growth (%) -2.0 4.0 2.0 3.0 0.0 0.0 3.0 4.0 1.8 1.8
Net Sales 37,010 43,796 41,968 40,232 40,107 44,329 43,899 42,379 1,63,006 1,70,713
YoY change (%) 8.7 21.4 17.4 13.3 8.4 1.2 4.6 5.3 15.3 4.7
Gross Profit 13,648 17,050 18,321 18,073 16,820 19,011 18,876 17,687 67,093 72,395
Margins (%) 36.9 38.9 43.7 44.9 41.9 42.9 43.0 41.7 41.2 42.4
EBITDA 5,007 7,117 8,176 8,009 6,889 8,724 8,444 7,863 28,309 31,921
Margins (%) 13.5 16.3 19.5 19.9 17.2 19.7 19.2 18.6 17.4 18.7
YoY growth (%) -9.6 27.5 51.5 45.7 37.6 22.6 3.3 -1.8 28.6 12.8
Depreciation 510 517 580 653 708 717 725 731 2,259 2,879
Interest 420 541 381 349 531 534 522 537 1,691 2,124
Other Income 555 532 508 564 539 524 535 521 2,159 2,119
PBT 4,633 6,591 7,722 7,571 6,190 7,997 7,733 7,117 26,518 29,037
Tax 1,274 1,686 2,169 2,035 1,665 2,121 2,034 1,903 7,165 7,724
Rate (%) 27.5 25.6 28.1 26.9 26.9 26.5 26.3 26.7 27.0 26.6
Adjusted PAT 3,359 4,905 5,553 5,536 4,525 5,875 5,699 5,214 19,353 21,313
YoY change (%) -13.2 28.5 49.7 46.5 34.7 19.8 2.6 -5.8 27.6 10.1
E: MOFSL Estimates

January 2024 93
 December 2023 Results Preview | Sector: Consumer

Colgate Neutral
CMP: INR2,482 | TP: INR2,400 (-3%) EPS CHANGE (%): FY24|25: 2.4|-3.5
 We expect volume growth of 2% YoY in 3QFY24  We expect EBITDA margin to improve YoY by 280bp.
 We expect gross margin improvements of 250bp YoY.  Key monitorables: Volume growth, RM costs, A&P spending,
and performance of new launch category.
Quarterly Performance (INR m)
Y/E March FY23 FY24
FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
Toothpaste Volume Gr % -1.0 0.0 -2.0 0.0 5.0 -1.0 2.0 3.0 -0.8 2.3
Net Sales (incldg. OOI) 11,968 13,875 12,913 13,506 13,237 14,711 13,744 14,474 52,262 56,165
YoY change (%) 2.6 2.6 0.9 3.8 10.6 6.0 6.4 7.2 2.5 7.5
Gross Profit 7,938 8,846 8,506 9,031 9,058 10,117 9,400 9,867 34,320 38,441
Gross margin (%) 66.3 63.8 65.9 66.9 68.4 68.8 68.4 68.2 65.7 68.4
EBITDA 3,257 4,080 3,615 4,519 4,181 4,821 4,230 4,688 15,470 17,920
Margins (%) 27.2 29.4 28.0 33.5 31.6 32.8 30.8 32.4 29.6 31.9
YoY growth (%) -8.3 1.8 -5.0 5.2 28.4 18.2 17.0 3.7 -1.2 15.8
Depreciation 442 439 437 431 438 443 482 483 1,748 1,846
Interest 13 13 13 11 11 11 14 16 49 51
Financial other Income 115 113 104 204 150 210 135 142 536 637
PBT 2,918 3,741 3,269 4,281 3,883 4,578 3,869 4,331 14,209 16,660
Tax 727 961 837 1,100 951 1,178 987 1,050 3,724 4,165
Rate (%) 24.9 25.7 25.6 25.7 24.5 25.7 25.5 24.2 26.2 25.0
Adj PAT 2,190 2,780 2,432 3,181 2,932 3,401 2,882 3,281 10,583 12,495
YoY change (%) -6.1 3.3 -3.6 9.1 33.9 22.3 18.5 3.1 1.2 18.1
E: MOFSL Estimates

Dabur Buy
CMP: INR558 | TP: INR685 (+23%) EPS CHANGE (%): FY24|25: 0.1|-2.0
 We expect 4% YoY volume growth in 3QFY24  We expect gross margin to improve 270bp YoY in 3QFY24.
 Rural business recovery and international business are key  Expected premiumization in urban market; growth will be
monitorables as it is still a concern for the company. driven by e-commerce channels.
Quarterly Performance (Consolidated) (INR m)
Y/E March FY23 FY24
FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
Domestic FMCG vol. growth (%) 5.0 2.0 -3.0 1.0 3.0 3.0 4.0 6.0 2.0 4.0
Net sales 28,224 29,865 30,432 26,778 31,305 32,038 32,745 30,461 1,15,299 1,26,548
YoY change (%) 8.1 6.0 3.4 6.4 10.9 7.3 7.6 13.8 5.9 9.8
Gross profit 12,943 13,551 13,850 12,268 14,588 15,482 15,783 14,638 52,612 60,490
Margin (%) 45.9 45.4 45.5 45.8 46.6 48.3 48.2 48.1 45.6 47.8
EBITDA 5,437 6,007 6,099 4,098 6,047 6,969 6,803 5,924 21,641 25,743
Margins (%) 19.3 20.1 20.0 15.3 19.3 21.8 20.8 19.4 18.8 20.3
YoY growth (%) -1.5 -3.2 -2.8 -9.6 11.2 16.0 11.5 44.6 -4.0 19.0
Depreciation 676 705 709 910 856 873 851 837 3,110 3,417
Interest 122 151 189 321 243 281 236 227 782 988
Other income 1,006 1,233 1,008 1,207 1,098 1,164 1,190 1,178 4,454 4,629
PBT 5,645 6,385 6,209 4,074 6,046 6,978 6,905 6,037 22,203 25,967
Tax 1,231 1,473 1,435 1,035 1,368 1,443 1,623 1,486 5,174 5,919
Rate (%) 21.8 23.1 23.1 25.4 22.6 20.7 23.5 24.6 23.3 22.8
Adjusted PAT 4,403 4,901 4,782 3,118 4,749 5,621 5,271 4,361 17,013 20,002
YoY change (%) 0.7 -2.8 -5.0 -17.8 7.8 14.7 10.2 39.9 -6.7 17.6
Reported PAT 4,403 4,901 4,782 3,008 4,639 5,151 4,941 4,141 17,013 18,872
E: MOFSL Estimates

January 2024 94
 December 2023 Results Preview | Sector: Consumer

Emami Buy
CMP: INR573 | TP: INR690 (+21%) EPS CHANGE (%): FY24|25: -4.4|-5.3
 We expect volume growth flat YoY in 3QFY24  We expect gross margin to improve 130bp YoY and EBITDA
margin to improve 20bp YoY.
 Watch out for commentaries on the outlook of pain  Growth outlook is muted for 3Q on weak seasonality and
management and healthcare products sustained slowdown in rural demand.
Consol. Quarterly performance (INR m)
Y/E MARCH FY23 FY24
FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
Domestic volume growth (%) 9.6 -1.0 -3.9 2.0 3.0 2.0 0.0 3.0 2.1 2.0
Net Sales 7,733 8,138 9,827 8,360 8,257 8,649 10,132 9,064 34,057 36,101
YoY change (%) 17.0 3.2 1.1 8.8 6.8 6.3 3.1 8.4 6.9 6.0
Gross Profit 4,872 5,422 6,472 5,278 5,401 6,061 6,809 5,969 22,044 24,239
Gross margin (%) 63.0 66.6 65.9 63.1 65.4 70.1 67.2 65.9 64.7 67.1
EBITDA 1,733 1,954 2,943 1,998 1,900 2,337 3,050 2,421 8,628 9,708
Margins (%) 22.4 24.0 29.9 23.9 23.0 27.0 30.1 26.7 25.3 26.9
YoY change 2.1 -29.5 -13.8 21.9 9.6 19.6 3.6 21.2 -9.4 12.5
Depreciation 242 245 238 250 228 227 257 286 974 997
Interest 25 18 18 14 21 23 22 20 74 86
Other Income 63 420 69 138 83 111 137 138 689 469
PBT 1,530 2,111 2,756 1,872 1,733 2,199 2,908 2,254 8,269 9,094
Tax 120 54 185 63 129 158 154 150 421 591
Rate (%) 7.8 2.6 6.7 3.3 7.4 7.2 5.3 6.6 5.1 6.5
PAT before Amortization 1,366 2,036 2,564 1,806 1,599 2,034 2,754 2,104 7,773 8,502
YoY change (%) -0.6 -17.1 -8.3 -4.6 17.0 -0.1 7.4 16.5 -8.8 9.4
E: MOFSL Estimates

Godrej Consumer Buy

CMP: INR1,145 | TP: INR1,330 (+16%) EPS CHANGE (%): FY24|25: -8.2|-10.5
 We expect flat sales growth YoY in 3QFY24.  Management’s strategic roadmap for new launches and
Raymond’s portfolio is a key monitorable
 We expect 260bp YoY improvement in gross margins.  Commentaries on the impact of currency depreciation on
the international businesses are key monitorables
Quarterly Performance (Consolidated) (INR m)
Y/E March FY23 FY24E
FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
Net Sales (including OOI) 31,250 33,919 35,989 32,002 34,489 36,020 36,349 33,482 1,33,160 1,40,340
YoY change (%) 8.0 7.2 9.0 9.8 10.4 6.2 1.0 4.6 8.5 5.4
Gross Profit 14,558 16,238 18,408 16,928 18,534 19,771 19,519 18,143 66,132 75,967
Margin (%) 46.6 47.9 51.1 52.9 53.7 54.9 53.7 54.2 49.7 54.1
EBITDA 5,326 5,743 7,675 6,648 6,818 7,234 7,924 7,168 24,305 28,562
Margins (%) 17.0 16.9 21.3 20.8 19.8 20.1 21.8 21.4 18.3 20.4
YoY growth (%) -12.8 -15.4 9.8 32.3 28.0 26.0 3.2 7.8 1.5 17.5
Depreciation 571 533 573 686 763 609 659 696 2,363 2,727
Interest 351 483 399 525 740 773 707 690 1,757 2,910
Other Income 275 399 432 579 691 659 665 668 1,684 2,683
PBT 4,562 4,804 6,725 5,777 5,617 6,319 7,223 6,450 21,868 25,609
Tax 1,093 989 1,188 1,034 1,611 1,866 1,625 1,504 4,303 6,606
Rate (%) 23.9 20.6 17.7 17.9 28.7 29.5 22.5 23.3 19.7 25.8
Adj PAT 3,470 3,815 5,538 4,743 4,006 4,453 5,598 4,946 17,566 19,002
YoY change (%) -16.4 -20.6 7.8 23.6 15.5 16.7 1.1 4.3 -2.0 8.2
Extra ordinaries -18 -227 -74 -222 -818 -125 -150 -178 -541 -1,271
Reported PAT 3,451 3,589 5,463 4,521 3,188 4,328 5,448 4,768 17,025 17,731
E: MOFSL Estimate

January 2024 95
 December 2023 Results Preview | Sector: Consumer

Hindustan Unilever Buy

CMP: INR2,656 | TP: INR3,220 (+21%) EPS CHANGE (%): FY24|25: 2.5|2.1
 We expect 2% YoY domestic volume growth in 3QFY24  Outlook on competition from local/regional players and rural
vs. urban demand
 We expect gross margin to expand 450bp YoY due to lower
 Prices have been cut to gain the market share.
palm oil costs
Quarterly performance (Standalone) (INR b)
Y/E March FY23 FY24
FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
Domestic volume growth (%) 6.0 4.0 5.0 4.0 3.0 2.0 2.0 3.0 5.0 2.5
Net sales 142.7 147.5 152.3 148.9 151.5 152.8 159.0 159.4 591.4 622.6
YoY change (%) 19.8 15.9 16.3 10.6 6.1 3.6 4.4 7.0 15.5 5.3
Gross Profit 67.6 67.6 72.3 72.5 75.6 80.6 82.7 80.2 280.0 319.0
Margin % 47.4 45.8 47.5 48.7 49.9 52.7 52.0 50.3 47.3 51.2
EBITDA 32.5 33.8 35.4 34.7 35.2 36.9 39.0 38.4 136.3 149.6
YoY change (%) 14.0 7.8 7.9 7.0 8.4 9.4 10.4 10.6 9.0 9.7
Margins (%) 22.8 22.9 23.2 23.3 23.2 24.2 24.6 24.1 23.0 24.0
Depreciation 2.6 2.5 2.6 2.6 2.6 2.7 2.7 2.8 10.3 10.7
Interest 0.3 0.3 0.3 0.2 0.5 0.7 0.4 0.4 1.0 2.0
Other income 1.4 1.2 2.3 1.6 1.9 2.8 1.9 1.8 6.4 8.4
PBT 31.0 32.2 34.8 33.5 34.0 36.4 37.8 37.0 131.4 145.2
Tax 8.0 5.8 8.7 8.7 8.9 9.1 9.7 9.5 31.2 37.2
Rate (%) 25.7 17.9 25.1 26.1 26.2 25.1 25.5 25.6 23.7 25.6
PAT bei 22.9 23.8 25.8 24.7 25.0 26.7 28.2 28.2 100.2 108.1
YoY change (%) 16.7 8.8 12.6 8.2 9.2 12.1 9.2 14.1 13.2 7.8
Reported Profit 22.9 26.2 25.1 25.5 24.7 27.2 28.2 27.6 99.6 107.7
E: MOFSL Estimates

Indigo Paints Buy

CMP: INR1,492 | TP: INR1,800 (+20%) EPS CHANGE (%): FY24|25: -7.0|-7.9
 We expect 21% YoY sales growth, supported by company  Watch out for commentaries on demand trends of the
initiatives. waterproofing business and expansion to larger cities.
 We estimate gross margin and EBITDA margin to improve  Demand outlook is positive due to festive and wedding
230bp and 250bp YoY, respectively seasons.
Consolidated Quarterly Performance25% 16% 16% (INR m)
Y/E March FY23 FY24
FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
Net Sales 2,240 2,426 2,813 3,255 2,884 2,790 3,406 3,746 10,733 12,826
Change (%) 43.6 23.7 6.0 12.9 28.8 15.0 21.1 15.1 18.5 19.5
Raw Material/PM 1,228 1,414 1,580 1,731 1,519 1,519 1,836 2,001 5,952 6,875
Gross Profit 1,012 1,012 1,233 1,524 1,365 1,271 1,570 1,745 4,781 5,951
Gross Margin (%) 45.2 41.7 43.8 46.8 47.3 45.6 46.1 46.6 44.5 46.4
EBITDA 353 338 406 717 491 421 576 803 1,815 2,291
Margin (%) 15.7 13.9 14.4 22.0 17.0 15.1 16.9 21.4 16.9 17.9
Change (%) 74.9 44.5 4.9 33.4 39.2 24.8 41.9 12.0 33.5 26.3
Interest 4 3 3 4 5 6 4 5 14 19
Depreciation 84 85 87 87 101 113 118 123 343 454
Other Income 5 32 38 28 38 32 28 33 101 131
PBT 269 282 353 654 423 335 483 708 1,558 1,949
Tax 70 74 91 168 108 81 126 187 402 503
Effective Tax Rate (%) 26.0 26.4 25.7 25.6 25.6 24.3 26.1 26.4 25.8 25.8
Adjusted PAT 199 208 263 487 310 253 357 521 1,156 1,446
Change (%) 71.5 53.2 8.1 40.7 55.9 22.1 35.9 7.0 37.5 25.1
E: MOFSL Estimates

January 2024 96
 December 2023 Results Preview | Sector: Consumer

ITC Buy
CMP: INR467 | TP: INR535 (+15%) EPS CHANGE (%): FY24|25: -2.0|-0.6
 We expect 2% YoY volume growth in Cigarettes with 5-  We expect gross margin to decline 150bp YoY and EBITDA
year average volume growth in mid -single digit business margin to fall 110bp YoY on a high base.
 Hotel business likely to outperform ahead of wedding and  Outlook on the other FMCG, Agri and paper & packaging
festive seasons businesses a key monitorable
Quarterly Performance (INR b)
Y/E March FY23 FY24E
FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
Est. cigarette vol. gr. (%) 26.0 21.0 15.0 12.0 8.0 4.0 2.0 4.0 18.5 4.5
Net Sales 172.9 161.3 162.3 164.0 158.3 165.5 171.6 181.5 660.4 676.8
YoY change (%) 41.5 26.7 2.3 5.6 -8.5 2.6 5.7 10.7 17.2 2.5
Gross Profit 88.1 91.9 95.5 96.0 94.1 94.9 98.5 105.7 362.2 393.2
Margin (%) 51.0 57.0 58.9 58.6 59.5 57.3 57.4 58.2 54.8 58.1
EBITDA 56.5 58.6 62.2 62.1 62.5 60.4 63.9 69.2 239.8 256.1
Growth (%) 41.5 27.1 22.0 18.9 10.7 3.0 2.8 11.5 26.5 6.8
Margins (%) 32.7 36.4 38.4 37.9 39.5 36.5 37.3 38.1 36.3 37.8
Depreciation 4.1 4.2 4.1 4.2 4.0 4.1 4.5 4.4 16.6 17.0
Interest 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.7 0.8
Other Income 3.1 5.1 8.7 7.5 7.1 9.0 7.8 7.2 24.4 31.1
PBT 55.4 59.4 66.8 65.2 65.5 65.1 67.2 71.9 246.8 269.4
Tax 13.7 14.7 16.5 15.1 16.4 15.9 16.5 18.1 60.0 66.8
Rate (%) 24.7 24.8 24.7 23.1 25.1 24.4 24.5 25.1 24.3 24.8
Adj PAT 41.7 44.7 50.3 50.1 49.0 49.3 50.7 53.9 186.8 202.6
YoY change (%) 38.4 20.8 21.0 19.6 17.6 10.3 0.8 7.4 24.1 8.4
E: MOFSL estimate

Jyothy Labs. Neutral

CMP: INR483 | TP: INR475 (-2%) EPS CHANGE (%): FY24|25: 3.5|5.3
 We expect consolidated net sales to grow 10.8% YoY  Expect out-of-home categories to see better demand
 We forecast gross margin expansion of 400bp YoY, led by a  Expansion in personal care category and performance of
decline in palm oil prices. Health and Wellness (HI) segment

Consolidated Quarterly Performance (INR m)

Y/E March FY23 FY24
FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
Net Sales 5,972 6,592 6,127 6,170 6,871 7,323 6,788 6,924 24,860 27,906
YoY change (%) 14.4 14.0 15.9 13.0 15.1 11.1 10.8 12.2 13.2 12.3
Gross Profit 2,380 2,670 2,640 2,821 3,289 3,604 3,197 3,276 10,511 13,367
Margins (%) 39.9 40.5 43.1 45.7 47.9 49.2 47.1 47.3 42.3 47.9
EBITDA 599 804 844 913 1,174 1,354 1,242 1,169 3,159 4,939
EBITDA growth % -7.9 19.9 39.4 59.4 96.2 68.3 47.3 28.0 26.4 56.4
Margins (%) 10.0 12.2 13.8 14.8 17.1 18.5 18.3 16.9 12.7 17.7
Depreciation 130 130 122 119 120 123 139 145 501 526
Interest 33 35 32 31 11 12 28 34 131 85
Other Income 44 53 153 57 79 132 114 109 395 435
PBT 479 693 842 819 1,123 1,351 1,190 1,098 2,922 4,762
Tax 90 109 169 227 250 311 276 258 595 1,095
Rate (%) 18.8 15.8 20.0 27.7 22.3 23.0 23.2 23.4 19.9 23.0
Adjusted PAT 389 584 674 593 873 1,040 914 841 2,327 3,667
YoY change (%) -2.9 38.5 90.4 78.0 124.1 78.2 35.6 41.9 54.2 57.6
E: MOFSL Estimates

January 2024 97
 December 2023 Results Preview | Sector: Consumer

Marico Buy
CMP: INR542 | TP: INR660 (+22%) EPS CHANGE (%): FY24|25: -0.9|1.9
 Expect 3% YoY domestic volumes growth in 3QFY24.  Rural slowdown could affect the domestic performance.
 We expect a 500bp YoY expansion in gross margin and  Outlook on food business and digital-first brands is a key
250bp YoY in EBITDA. monitorable.
Quarterly Performance (INR m)
Y/E March FY23 FY24E
FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
Domestic volume growth (%) -5.0 3.0 4.0 5.0 3.0 3.0 3.0 7.0 1.8 4.0
Net Sales 25,580 24,960 24,700 22,400 24,770 24,760 24,206 23,818 97,640 97,554
YoY Change (%) 1.3 3.2 2.6 3.7 -3.2 -0.8 -2.0 6.3 2.6 -0.1
Gross Profit 11,520 10,890 11,100 10,620 12,380 12,500 12,055 11,098 44,130 48,033
Gross margin (%) 45.0 43.6 44.9 47.4 50.0 50.5 49.8 46.6 45.2 49.2
EBITDA 5,280 4,330 4,560 3,930 5,740 4,970 5,059 4,521 18,100 20,290
Margins (%) 20.6 17.3 18.5 17.5 23.2 20.1 20.9 19.0 18.5 20.8
YoY Change (%) 9.8 2.4 5.8 13.6 8.7 14.8 10.9 15.0 7.7 12.1
Depreciation 360 370 390 430 360 390 406 432 1,550 1,588
Interest 100 150 140 170 170 200 175 181 560 726
Other Income 170 190 400 680 460 380 340 377 1,440 1,557
PBT 4,990 4,000 4,430 4,010 5,670 4,760 4,818 4,285 17,430 19,534
Tax 1,220 930 1,100 960 1,310 1,160 1,166 1,052 4,210 4,688
Rate (%) 24.4 23.3 24.8 23.9 23.1 24.4 24.2 24.5 24.2 24.0
Adjusted PAT 3,710 3,010 3,280 3,020 4,270 3,530 3,602 3,243 13,020 14,646
YoY Change (%) 4.2 -2.6 5.8 20.8 15.1 17.3 9.8 7.4 6.3 12.5
E: MOFSL Estimates

Nestlé India Neutral

CMP: INR2,737 | TP: INR2,670 (-3%) EPS CHANGE (%): CY23|24: 1.0|-2.1
 We expect sales growth of 11% YoY and the growth  We expect a higher contribution from out-of-home
momentum will continue. consumption
 Expect gross margin expansion of 190bp YoY and EBITDA  Watch out for commentaries on demand and material costs
margin expansion of 120bp.
Quarterly performance (INR m)
Y/E December CY22 CY23E
CY22 FY24E*
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4QE 5QE
Net Sales 39,926 40,457 46,018 42,568 48,305 46,585 50,368 47,250 51,687 1,68,970 2,44,196
YoY Change (%) 10.6 16.4 18.5 13.6 21.0 15.1 9.5 11.0 7.0 14.6 44.5
COGS 17,850 18,656 21,777 19,215 22,315 21,050 21,916 20,412 22,174 77,499 1,07,867
Gross Profit 22,076 21,801 24,241 23,353 25,990 25,535 28,452 26,838 29,513 91,471 1,36,328
Margin (%) 55.3 53.9 52.7 54.9 53.8 54.8 56.5 56.8 57.1 54.1 55.8
Operating Exp 12,805 13,358 14,141 13,584 14,890 14,947 16,165 15,451 17,212 54,346 78,665
EBITDA 9,271 8,442 10,101 9,769 11,100 10,588 12,287 11,387 12,301 37,126 57,664
Margins (%) 23.2 20.9 21.9 22.9 23.0 22.7 24.4 24.1 23.8 22.0 23.6
YoY Growth (%) -0.3 1.2 6.1 15.7 19.7 25.4 21.6 16.6 10.8 4.1 55.3
Depreciation 1,045 1,017 982 987 1,017 1,074 1,112 1,135 1,149 4,030 5,486
Interest 356 370 372 448 370 328 314 359 381 1,546 1,752
Other income 214 194 306 296 337 240 333 319 340 1,010 1,569
PBT 8,085 7,249 9,053 8,630 10,049 9,427 11,195 10,213 11,111 32,560 51,995
Tax 2,115 1,850 2,379 2,310 2,538 2,410 3,139 2,635 2,889 8,655 13,611
Rate (%) 26.2 25.5 26.3 26.8 25.3 25.6 28.0 25.8 26.0 26.6 26.2
Adjusted PAT 5,969 5,399 6,674 6,319 7,511 7,017 8,055 7,578 8,222 23,905 38,383
YoY Change (%) -0.9 2.9 7.4 11.6 25.8 30.0 20.7 19.9 9.5 3.1 60.6
E: MOFSL Estimates; *Note: FY24 is 15-month period as the company changed its accounting year-end from December to March

January 2024 98
 December 2023 Results Preview | Sector: Consumer

Page Industries Neutral

CMP: INR38,771 | TP: INR37,560 (-3%) EPS CHANGE (%): FY24|25: -1.5|-5.1
 Expect 8% YoY increase in revenue on the back of wedding  We expect gross margin and EBITDA margin increase of
and festive seasons. 350bp/460bp YoY in 3QFY24.
 Watch out for athleisure demand momentum.  Watch out for commentaries recovery in the rural demand in
the kids and women athleisure
Quarterly Performance (INR m)
Y/E March FY23 FY24
FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
Net Sales 13,413 12,282 12,233 9,691 12,324 11,251 13,211 10,344 47,886 47,131
YoY change (%) 167.4 13.3 2.8 -12.8 -8.1 -8.4 8.0 6.7 23.2 -1.6
Gross Profit 7,311 6,999 6,408 5,488 6,562 6,262 7,385 5,854 26,207 26,063
Gross margin (%) 54.5 57.0 52.4 56.6 53.2 55.7 55.9 56.6 54.7 55.3
EBITDA 2,978 2,379 1,928 1,343 2,419 2,335 2,695 2,021 8,627 9,470
Margins (%) 22.2 19.4 15.8 13.9 19.6 20.8 20.4 19.5 18.0 20.1
YoY change 770.7 1.9 -23.1 -49.7 -18.8 -1.8 39.8 50.4 9.8 9.8
Depreciation 180 188 200 213 210 246 230 236 781 922
Interest 85 92 100 136 127 112 120 121 413 480
Other Income 33 27 16 71 19 17 20 20 147 75
PBT 2,746 2,125 1,645 1,065 2,100 1,994 2,366 1,683 7,581 8,143
Tax 675 504 407 282 517 491 587 425 1,869 2,019
Rate (%) 24.6 23.7 24.8 26.5 24.6 24.6 24.8 25.3 24.6 24.8
PAT 2,070 1,621 1,237 784 1,584 1,503 1,779 1,258 5,712 6,124
YoY change (%) 1,790.9 1.0 -29.1 -58.9 -23.5 -7.3 43.8 60.6 6.5 7.2
E: MOFSL Estimates

P&G Hygiene Neutral

CMP: INR17,373 | TP: INR16,780 (-3%) EPS CHANGE (%): FY23|24: 0.5|-1.9
 We expect EBITDA margin to improve 30bp YoY in 2QFY24
 Sales to grow 9% YoY in 2QFY24 (June year-end).
(June year-end).
 Cost structure will be affected by the high price of  A&P spends and demand outlook are key monitorables.
commodity with no sign of reduction.
Standalone - Quarterly Earnings (INR m)
Y/E June FY23 FY24
FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2QE 3QE 4QE
Net Sales 10,428 11,374 8,831 8,491 11,384 12,398 10,420 9,414 39,123 43,615
YoY Change (%) -1.5 4.1 -0.9 12.1 9.2 9.0 18.0 10.9 3.0 11.5
Gross profit 6,116 6,513 4,992 4,893 6,932 7,315 6,200 5,547 22,549 25,995
Margin (%) 58.6 57.3 56.5 57.6 60.9 59.0 59.5 58.9 57.6 59.6
EBITDA 2,140 2,905 1,493 2,114 2,849 3,200 2,657 2,438 8,686 11,144
Growth -29.0 -2.0 -9.5 215.1 33.1 10.2 78.0 15.3 4.7 28.3
Margins (%) 20.5 25.5 16.9 24.9 25.0 25.8 25.5 25.9 22.2 25.6
Depreciation 140 144 146 154 143 156 165 143 584 607
Interest 10 39 36 30 19 35 36 30 114 120
Other Income 67 93 144 101 158 140 137 136 406 571
PBT 2,058 2,815 1,456 2,031 2,845 3,148 2,593 2,401 8,395 10,987
Tax 514 737 380 553 738 768 669 627 2,184 2,802
Rate (%) 25.0 26.2 18.7 27.2 25.9 24.4 25.8 26.1 24.4 25.5
Reported PAT 1,544 2,075 1,650 1,478 2,107 2,380 1,924 1,774 6,781 8,186
Adj PAT 1,544 2,079 1,075 1,478 2,107 2,380 1,924 1,774 6,210 8,186
YoY Change (%) -29.3 -2.0 -4.9 247.2 36.4 14.5 78.9 20.1 6.0 31.8
Margins (%) 14.8 18.3 12.2 17.4 18.5 19.2 18.5 18.9 15.9 18.8
E: MOFSL Estimates

January 2024 99
 December 2023 Results Preview | Sector: Consumer

Pidilite Industries Neutral

CMP: INR2,697 | TP: INR2,790 (+3%) EPS CHANGE (%): FY24|25: 1.2|-0.1
 We expect consolidated revenue to grow 7.8% YoY.  We expect gross margin and EBITDA margin to expand
sharply YoY, on account of a steep decline in VAM costs
 The surge in real estate is positive for demand.  Outlook on domestic and international demand is a key
monitorable.
Consolidated - Quarterly Earning Model (INR m)
Y/E March FY23 FY24E
FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
Net Sales 31,011 30,112 29,976 26,893 32,751 30,760 32,314 30,205 1,17,991 1,26,031
YoY change (%) 60.1 14.7 5.2 7.3 5.6 2.2 7.8 12.3 18.9 6.8
Gross Profit 12,931 12,342 12,541 12,582 16,054 15,783 16,771 15,761 50,397 64,369
Margin (%) 41.7 41.0 41.8 46.8 49.0 51.3 51.9 52.2 42.7 51.1
EBITDA 5,295 4,999 4,959 4,592 7,070 6,797 7,506 7,110 19,844 28,483
YoY change (%) 52.3 -9.0 -9.7 14.5 33.5 36.0 51.4 54.9 7.4 43.5
Margins (%) 17.1 16.6 16.5 17.1 21.6 22.1 23.2 23.5 16.8 22.6
Depreciation 613 636 686 762 734 752 789 808 2,697 3,084
Interest 90 117 151 118 119 131 148 883 476 1,281
Other Income 107 110 51 228 234 316 180 202 496 932
PBT 4,698 4,355 4,173 3,940 6,451 6,230 6,749 5,621 17,166 25,050
Tax 1,157 1,098 1,052 1,038 1,704 1,631 1,721 1,457 4,344 6,513
Rate (%) 24.6 25.2 25.2 26.3 26.4 26.2 25.5 25.9 25.3 26.0
Adj PAT 3,541 3,347 3,061 2,873 4,746 4,599 5,028 4,164 12,822 18,537
YoY change (%) 64.4 -10.7 -13.9 15.3 34.0 37.4 64.2 44.9 7.3 44.6
Margins (%) 11.4 11.1 10.2 10.7 14.5 15.0 15.6 13.8 10.9 14.7
E: MOFSL Estimates

Tata Consumer Products Buy

CMP: INR1,080 | TP: INR1,190 (+10%) EPS CHANGE (%): FY24|25: -2|-1
 We expect revenue for the India-branded tea business to  Nourishco is likely to continue its strong performance
grow 6% YoY, led by volume growth of 3% YoY
 EBITDA margin is likely to improve to ~13.8% in 3QFY24 vs.  Tea and coffee prices are the key monitorables
13.1% in 3QFY23.
Consolidated - Quarterly Earning Model
Y/E March FY23 FY24
FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
Gross Sales 33.3 33.6 34.7 36.2 37.4 37.3 37.7 40.1 137.8 152.6
YoY Change (%) 10.6 10.9 8.3 14.0 12.5 11.0 8.6 10.8 10.9 10.7
Total Expenditure 28.7 29.3 30.2 31.1 32.0 32.0 32.5 34.5 119.3 130.9
EBITDA 4.6 4.3 4.5 5.1 5.5 5.4 5.2 5.6 18.6 21.7
Margins (%) 13.7 12.9 13.1 14.1 14.6 14.4 13.8 14.1 13.5 14.2
Depreciation 0.7 0.7 0.8 0.8 0.8 0.9 1.0 1.0 3.0 3.7
Interest 0.2 0.2 0.2 0.3 0.3 0.3 0.2 0.2 0.9 0.9
Other Income 0.4 0.3 0.5 0.6 0.6 0.9 0.6 0.7 1.7 2.7
PBT before EO expense 4.0 3.7 4.0 4.6 4.9 5.1 4.7 5.1 16.3 19.8
Extra-Ord expense -0.2 1.1 0.8 -0.1 -0.1 -0.1 0.0 0.0 1.6 -0.2
PBT 3.8 4.8 4.8 4.5 4.9 4.9 4.7 5.1 17.9 19.6
Tax 1.0 1.3 1.1 1.0 1.3 1.3 1.3 1.4 4.5 5.3
Rate (%) 27.1 26.3 23.4 23.2 26.7 26.8 27.0 27.0 24.9 26.9
Minority Interest 0.2 0.6 0.1 0.2 0.2 0.3 0.0 0.0 1.2 0.5
Profit/Loss of Asso. Cos. 0.0 0.3 -0.1 -0.6 -0.2 0.0 0.0 -0.2 -0.3 -0.3
Reported PAT 2.6 3.3 3.5 2.7 3.2 3.4 3.4 3.6 12.0 13.5
Adj PAT 2.7 2.4 2.9 2.7 3.2 3.5 3.4 3.6 10.8 13.7
YoY Change (%) 45.4 -12.7 6.5 18.1 17.2 42.8 16.4 30.6 11.2 26.1
Margins (%) 8.2 7.3 8.4 7.6 8.6 9.4 9.0 8.9 7.9 9.0

January 2024 100

 December 2023 Results Preview | Sector: Consumer

United Breweries Sell

CMP: INR1,792 | TP: INR1,480 (-18%) EPS CHANGE (%): FY24|25: 3.5|-3.0
 We expect revenue to grow 12.6% YoY in 3QFY24  We anticipate gross margin to expand sequentially on low
barley prices.
 We expect gross margin and EBITDA margin increase of  Outlook on state mix and realization growth is a
750bp and 700bp YoY. monitorable.
Standalone Quarterly Performance (INR m)
Y/E March FY23 FY24E
FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
Net Sales 24,367 16,796 16,110 17,645 22,732 18,880 18,140 20,047 74,999 79,799
YoY Change (%) 117.9 17.8 1.9 3.4 -6.7 12.4 12.6 13.6 28.5 6.4
Gross Profit 10,784 7,837 6,741 6,812 9,221 8,408 8,943 9,507 32,346 36,079
Margin (%) 44.3 46.7 41.8 38.6 40.6 44.5 49.3 47.4 43.1 45.2
EBITDA 2,651 2,191 766 535 2,228 1,846 2,135 2,376 6,162 8,585
YoY Change (%) 177.8 32.3 -63.4 -79.5 -15.9 -15.8 178.5 344.6 -11.5 39.3
Margins (%) 10.9 13.0 4.8 3.0 9.8 9.8 11.8 11.9 8.2 10.8
Depreciation 575 520 502 507 513 508 554 591 2,106 2,167
Interest 8 10 16 12 17 14 21 25 -288 77
Other Income 104 143 130 116 103 122 139 132 160 497
PBT 2,171 1,805 131 132 1,801 1,446 1,698 1,892 4,257 6,837
Tax 554 463 152 35 440 369 455 499 1,210 1,764
Rate (%) 25.5 25.6 40.2 26.3 24.5 25.5 26.8 26.4 28.4 25.8
Adj PAT 1,617 1,342 226 97 1,361 1,076 1,243 1,393 3,295 5,073
YoY Change (%) 424.3 66.4 -80.6 -94.0 -15.8 -19.8 449.2 1,331.7 -10.0 54.0
Margins (%) 6.6 8.0 1.4 0.6 6.0 5.7 6.9 6.9 4.4 6.4
E: MOFSL Estimates

United Spirits Neutral

CMP: INR1,106 | TP: INR1,060 (-4%) EPS CHANGE (%): FY24|25: -5.4|-6.2
 Expect mid to high single-digit volume growth in P&A.  Expect gross margin expansion of 180bp YoY and EBITDA
margin of 130bp YoY in 3QFY24.
 The demand for the popular category is still lagging.  Outlook on RM cost and on-trade performance is key
monitorable.
Quarterly Performance (INR m)
Y/E March FY23 FY24E
FY23 FY24E
(Standalone) 1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
Volume growth % 17.9 8.3 -25.0 -27.3 -28.6 -27.1 0.7 7.4 -8.4 -11.9
Total revenues 21,693 29,042 27,811 24,938 21,719 28,647 29,340 27,091 1,03,737 1,06,797
YoY change (%) 34.3 18.7 -3.4 -0.3 0.1 -1.4 5.5 8.6 10.1 2.9
Gross Profit 8,882 11,449 11,281 11,315 9,474 12,437 12,440 11,413 43,019 46,350
Margin (%) 40.9 39.4 40.6 45.4 43.6 43.4 42.4 42.1 41.5 43.4
EBITDA 2,992 4,424 3,678 3,380 3,851 4,701 4,254 3,907 14,187 16,714
Margins (%) 13.8 15.2 13.2 13.6 17.7 16.4 14.5 14.4 13.7 15.6
EBITDA growth (%) 78.4 10.2 -24.9 -21.1 28.7 6.3 15.7 15.6 -6.1 17.8
Depreciation 653 645 636 684 650 653 693 737 2,706 2,733
Interest 166 210 243 360 43 262 267 259 1,039 831
Other income 251 85 232 169 209 388 244 258 742 1,098
PBT 2,424 3,654 3,031 2,505 3,367 4,174 3,537 3,169 11,184 14,247
Tax -313 1,011 796 381 857 991 891 776 1,945 3,516
Rate (%) -12.9 27.7 26.3 15.2 25.5 23.7 25.2 24.5 17.4 24.7
Adj. PAT 2,737 2,643 2,235 2,124 2,510 3,183 2,646 2,393 9,239 10,732
YoY change (%) 217.1 17.9 -28.1 -24.1 -8.3 20.4 18.4 12.7 -4.5 16.2
E: MOFSL Estimate

January 2024 101

 December 2023 Results Preview | Sector: Consumer

Varun Beverages Buy

CMP: INR1,242 | TP: INR1,370 (+10%) EPS CHANGE (%): CY23|24: 4|5
 We expect CSD sales volume to grow 15% YoY in 4QCY23  We expect EBITDA margin to improve to ~15.4% vs. 13.9% in
4QCY22
 Scale-up in international geographies and further capex
 Juice mix is likely to remain at 5.3% of total volume YoY
update are the key monitorables
Consolidated - Quarterly Earning Model (INRm)
Y/E December CY22 CY23
CY22 CY23E
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4QE
Gross Sales 28,275 49,548 31,766 22,142 38,930 56,114 38,705 26,737 1,31,731 1,60,485
YoY Change (%) 26.2 102.3 32.5 27.7 37.7 13.3 21.8 20.8 49.3 21.8
Total Expenditure 22,965 37,042 24,776 19,067 30,949 41,004 29,884 22,631 1,03,850 1,24,468
EBITDA 5,310 12,506 6,990 3,075 7,980 15,110 8,821 4,106 27,881 36,018
Margins (%) 18.8 25.2 22.0 13.9 20.5 26.9 22.8 15.4 21.2 22.4
Depreciation 1,313 1,531 1,531 1,797 1,722 1,719 1,708 1,795 6,172 6,944
Interest 470 464 453 475 626 694 625 570 1,861 2,514
Other Income 85 105 106 92 101 416 185 106 388 809
PBT before EO expense 3,612 10,616 5,112 896 5,734 13,113 6,673 1,847 20,236 27,368
Extra-Ord expense 0 0 0 0 0 0 0 0 0 0
PBT 3,612 10,616 5,112 896 5,734 13,113 6,673 1,847 20,236 27,368
Tax 901 2,596 1,157 81 1,348 3,057 1,529 406 4,735 6,340
Rate (%) 25.0 24.5 22.6 9.0 23.5 23.3 22.9 22.0 23.4 23.2
MI & Profit/Loss of Asso. Cos. 169 146 144 68 95 118 130 78 527 421
Reported PAT 2,542 7,874 3,810 748 4,291 9,938 5,015 1,363 14,974 20,607
Adj PAT 2,542 7,874 3,810 748 4,291 9,938 5,015 1,363 14,974 20,607
YoY Change (%) 96.7 155.5 58.7 353.3 68.8 26.2 31.6 82.3 115.8 37.6
Margins (%) 9.0 15.9 12.0 3.4 11.0 17.7 13.0 5.1 11.4 12.8

January 2024 102

 December 2023 Results Preview | Sector: EMS

EMS
Company Strong revenue growth to continue; margin under pressure
Kaynes Technologies Revenue/EBITDA to grow ~48%/38% YoY in 3QFY24
Avalon Technologies
Cyient DLM  EMS companies (under our coverage universe) are expected to report strong
Syrma SGS revenue growth of 48%/20% YoY/QoQ in 3QFY24 aided by healthy orderbook
Data Patterns and new client additions.
 We are expecting a good orderbook growth sequentially across the EMS space
with anticipation of a major order inflow in 4QFY24/1QFY25.
 Kaynes is expected to report the highest revenue growth of ~70%/36% YoY/QoQ
followed by Syrma and CyientDLM with growth of 55%/12% YoY/QoQ and
50%/10% YoY/QoQ, respectively. Avalon is likely to post a decent quarter with
revenue growth of ~15%/33% YoY/QoQ, mainly led by the domestic business.
 EBITDA margin for our EMS coverage universe can see some contraction (90bp
YoY) for the quarter due to higher SG&A costs (mainly top tier recruitments) and
initial prototyping expenses (for new clients). We expect our coverage universe
to witness ~90bp YoY contraction in margins primarily due to 350bp/120bp/
60bp contractions in DATAPATT/SYRMA/CYIENTDLM margins.

KAYNES and CYIENTDL to report the highest YoY EBITDA growth

 KAYNES: We are expecting a strong revenue growth of 70% YoY this quarter as
the company has added multiple clients in the last few quarters, which are now
translating into revenue. Margins are expected to be better sequentially;
however, the company is doing multiple prototyping works for new clients that
can lead to higher initial costs, as reported in 2QFY24. OSAT and PCB’s capacity
additions are on track and management is expecting the first OSAT line to start
in Apr’24.
 Avalon: Revenue is expected to grow in the mid-teens (~15% YoY) with marginal
improvement in the margins (90bp YoY). The US operations are still under stress
and Avalon can expect a revenue decline this quarter from the US, while the
domestic business is scaling up gradually. The company has won a few big
orders in the US and domestic market, which are anticipated to contribute to its
revenue in FY25.
 SYRMA: We are expecting a revenue/EBITDA growth of 55%/36% YoY in 3QFY24
backed by strong growth from the consumer business. New industrial clients are
expected to scale up in 1QFY25 instead of 2QFY24. Syrma secured large
consumer orders with lower margins, leading to an increased share of consumer
revenue and lower margins due to the slower industrial client ramp-up.
Management anticipates a higher industrial revenue impact from FY26.
 CYIENTDL: We are expecting the company to record the highest ever quarterly
revenue in 3QFY24 with 50% YoY growth. However, margin is expected to
contract 60bp largely due to continued spending on higher SG&A. Orderbook is
expected to witness a flattish to low single-digit growth.
 DATAPATT: We are expecting Revenue/EBITDA to grow 25%/15% YoY, while
margin is likely to contract 350bp YoY due to the high base.

Sumant Kumar - Research Analyst (Sumant.Kumar@MotilalOswal.com)

Research Analyst: Meet Jain (meet.jain@motilaloswal.com) / Omkar Shintre (omkar.shintre@motilaloswal.com)
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Exhibit 1: Quarterly performance

SALES (INR M) EBDITA (INR M) NET PROFIT (INR M)
CMP
RECO Var Var Var Var Var Var
Sector (INR) Dec-23 Dec-23 Dec-23
% YoY % QoQ % YoY % QoQ % YoY % QoQ
Avalon Tech 544 Buy 2,676 15.0 33.1 256 26.7 103.0 144 150.8 97.6
Cyient DLM 675 Buy 3,216 50.0 10.2 292 41.2 23.9 146 154.9 -0.7
Data Pattern 1840 Neutral 1,398 25.0 29.0 539 14.6 32.3 374 12.3 10.8
Kaynes Tech 2669 Buy 4,915 70.0 36.2 703 70.8 44.1 446 95.1 38.0
Syrma SGS Tech. 660 Buy 7,946 55.0 11.6 650 36.0 32.7 355 6.9 19.5

Exhibit 2: Valuation Summary

CMP EPS (INR) PE (x) PB (x) ROE (%)
Company Name INR Reco
FY24E FY25E FY26E FY24E FY25E FY26E FY24E FY25E FY26E FY24E FY25E FY26E
EMS 77.0 49.9 34.1 8.1 7.0 5.8 10.6 14.0 17.1
Avalon Tech 544 Buy 8.6 15.2 21.5 63.3 35.9 25.4 6.0 5.1 4.3 9.9 15.4 18.3
Cyient DLM 675 Buy 7.9 14.3 23.5 85.5 47.1 28.8 5.6 5.0 4.2 10.8 11.2 16.0
Data Pattern 1,840 Neutral 31.5 43.2 60.4 58.4 42.6 30.5 7.7 6.5 5.4 14.1 16.6 19.4
Kaynes Tech 2,669 Buy 28.2 44.9 62.5 94.6 59.4 42.7 13.8 11.2 8.9 15.8 20.8 23.2
Syrma SGS Tech. 660 Buy 8.1 12.0 18.8 81.2 54.8 35.0 6.9 6.2 5.2 8.9 11.9 16.1

Exhibit 3: Relative performance – three months (%) Exhibit 4: Relative performance – one year (%)
Nifty Index MOFSL EMS Index Nifty Index MOFSL EMS Index
114 400

109 320

104 240

99 160

94 80
Oct-23

Dec-23
Sep-23

Nov-23

Mar-23

Sep-23
Jun-23
Dec-22

Dec-23
Source: Bloomberg, MOFSL Source: Bloomberg, MOFSL

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 December 2023 Results Preview | Sector: EMS

The tables below provide a snapshot of actual and estimated numbers for companies under the MOFSL coverage
universe. Highlighted columns indicate the quarter/financial year under review.

Avalon Technologies Buy

CMP INR544 | TP: INR640 (+18%) EPS CHANGE (%): FY24|25: -19|-10
 Revenue is expected to grow 15% YoY and EBITDA margin  International growth is projected to be in low single-digit
is likely to be ~9.6% in 3QFY24. to flat for FY24.
 The domestic revenue growth is likely to drive sales for  Improvement in business in the US would be the key
the company. monitorable.
Consol. - Quarterly Earning (INR m)
Y/E March FY23 FY24 FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
Gross Sales 1,960 2,447 2,327 2,718 2,351 2,010 2,676 3,262 9,447 10,298
YoY Change (%) NA NA NA NA 19.9 -17.9 15.0 20.0 350.4 9.0
Total Expenditure 1,765 2,161 2,125 2,307 2,189 1,884 2,420 2,819 8,319 9,312
EBITDA 195 286 202 411 162 126 256 443 1,128 987
Margins (%) 10.0 11.7 8.7 15.1 6.9 6.3 9.6 13.6 11.9 9.6
Depreciation 46 49 50 52 53 55 62 73 197 243
Interest 71 100 86 95 56 32 37 40 348 165
Other Income 66 64 12 38 51 47 40 45 144 184
PBT before EO expense 145 201 78 302 105 86 197 375 727 762
PBT 145 201 78 302 105 86 197 375 727 762
Tax 52 53 21 75 34 13 53 101 202 201
Rate (%) 35.8 26.6 26.7 24.7 32.4 15.2 27.0 27.0 27.8 26.4
Reported PAT 93 148 57 227 71 73 144 274 525 561
Adj PAT 93 148 57 227 71 73 144 274 525 561
YoY Change (%) NA NA NA NA -23.9 -50.7 150.8 20.6 NA 6.9
Margins (%) 4.7 6.0 2.5 8.4 3.0 3.6 5.4 8.4 5.6 5.4

Cyient DLM Buy

CMP INR675 | TP: INR830 (+23%) EPS CHANGE (%): FY24|25: -9|-12
 Revenue is expected to grow 50% YoY led by significant  Margin is likely to contract to ~9.1% due to higher other
traction in Aerospace and Defense. expenses.
 Efficient execution of large order books will be the key  New client additions and order inflows will be the key
focus area for the company. monitorables.
Consol. - Quarterly Earning (INR m)
Y/E March FY23 FY24 FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
Gross Sales 1,701 1,702 2,144 2,774 2,171 2,918 3,216 3,802 8,320 12,107
YoY Change (%) NA NA NA NA 27.6 71.5 50.0 37.1 15.5 45.5
Total Expenditure 1,585 1,465 1,938 2,455 1,972 2,683 2,924 3,352 7,442 10,931
EBITDA 116 237 206 319 200 235 292 450 878 1,177
Margins (%) 6.8 13.9 9.6 11.5 9.2 8.1 9.1 11.8 10.6 9.7
Depreciation 49 50 47 48 48 55 57 60 194 220
Interest 67 78 85 86 91 76 60 45 315 272
Other Income 85 -7 -2 -13 9 93 20 30 63 152
PBT before EO expense 85 102 73 172 70 198 195 375 432 837
PBT 85 102 73 172 70 198 195 375 432 837
Tax 22 31 15 46 16 51 49 94 114 211
Rate (%) 25.4 30.4 21.3 26.9 23.3 25.9 25.2 25.2 26.5 25.2
Reported PAT 63 71 57 126 54 147 146 280 317 626
Adj PAT 63 71 57 126 54 147 146 280 317 626
YoY Change (%) NA NA NA NA -15.2 106.4 154.9 122.7 -20.2 97.4
Margins (%) 3.7 4.2 2.7 4.5 2.5 5.0 4.5 7.4 3.8 5.2

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Data Pattern Neutral

CMP INR1,840 | TP: INR2,050 (+11%) EPS CHANGE (%): FY24|25: -1|0
 Revenue is expected to grow 25% YoY with an EBITDA  New product development will be the key focus area for
margin of ~38.6%. the company.
 Movement in working capital requirements will be the key
monitorable.

Consol. - Quarterly Earning (INR m)

Y/E March FY23 FY24 FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
Gross Sales 684 882 1,118 1,851 897 1,083 1,398 2,406 4,535 5,784
YoY Change (%) NA 136.8 88.8 322.2 31.2 22.9 25.0 30.0 45.9 27.6
Total Expenditure 471 580 648 1,117 619 676 858 1,313 2,816 3,466
EBITDA 213 302 470 734 278 408 539 1,093 1,718 2,318
Margins (%) 31.1 34.2 42.1 39.6 31.0 37.6 38.6 45.4 37.9 40.1
Depreciation 20 21 21 22 28 31 36 42 84 137
Interest 16 12 21 28 17 23 28 35 77 103
Other Income 17 19 19 38 116 108 25 45 92 295
PBT before EO expense 194 287 446 721 349 463 500 1,061 1,649 2,373
PBT 194 287 446 721 349 463 500 1,061 1,649 2,373
Tax 52 76 113 168 91 125 126 267 409 608
Rate (%) 26.7 26.6 25.4 23.3 25.9 27.0 25.2 25.2 24.8 25.6
Reported PAT 142 211 333 554 258 338 374 794 1,240 1,765
Adj PAT 142 211 333 554 258 338 374 794 1,240 1,765
YoY Change (%) NA 104.4 158.5 517.9 81.4 60.5 12.3 43.4 32.2 42.3
Margins (%) 20.8 23.9 29.8 29.9 28.8 31.2 26.8 33.0 27.3 30.5

Kaynes Technologies Buy

CMP INR2,669 | TP: INR3,130 (+17%) EPS CHANGE (%): FY24|25: -2|1
 Revenue is expected to grow 70% YoY and EBITDA margin
 OSAT/PCB capacity addition to remain in focus
is anticipated to be ~14.3% in 3QFY24.
 Orderbook inflow to be the key monitorable

Consol. - Quarterly Earning (INR m)

Y/E March FY23 FY24 FY23 FY24
1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
Gross Sales 1,993 2,732 2,891 3,645 2,972 3,608 4,915 5,905 11,260 17,400
YoY Change (%) NA NA 57.6 52.8 49.1 32.1 70.0 62.0 59.4 54.5
Total Expenditure 1,747 2,299 2,479 3,052 2,569 3,121 4,212 4,942 9,578 14,843
EBITDA 246 432 412 593 403 488 703 963 1,682 2,556
Margins (%) 12.3 15.8 14.2 16.3 13.5 13.5 14.3 16.3 14.9 14.7
Depreciation 46 47 46 48 53 65 72 77 187 267
Interest 73 103 92 81 113 118 115 120 349 466
Other Income 7 7 26 74 81 90 80 70 114 321
PBT before EO expense 134 289 300 536 319 394 596 836 1,259 2,144
PBT 134 289 300 536 319 394 596 836 1,259 2,144
Tax 34 79 71 124 72 71 150 210 308 503
Rate (%) 25.2 27.3 23.7 23.2 22.6 18.0 25.2 25.2 24.5 23.5
MI & Profit/Loss of Asso. Cos. 2 -2 0 0 0 0 0 0 0 0
Reported PAT 99 212 229 412 246 323 446 625 951 1,641
Adj PAT 99 212 229 412 246 323 446 625 951 1,641
YoY Change (%) NA NA 112.7 107.6 149.0 52.8 95.1 51.8 -547.7 72.5
Margins (%) 5.0 7.7 7.9 11.3 8.3 9.0 9.1 10.6 8.4 9.4

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Syrma SGS Buy

CMP INR660| TP: INR760 (+15%) EPS CHANGE (%): FY24|25: -7|-8
 Revenue/EBITDA is expected to grow 55%/36% YoY and  Orderbook growth to be a key monitorable
EBITDA margin is anticipated to contract to ~8.2%
 Consumer segment mix is expected to increase in FY24  Entry into new vertical, such as IT Hardware, will remain in
focus for the company
Consol. - Quarterly Earning (INRm)
Y/E March FY23 FY24 FY23 FY24
1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
Gross Sales 3,893 4,669 5,126 6,795 6,013 7,117 7,946 10,193 20,484 31,269
YoY Change (%) NA 250.6 140.0 125.2 62.0 52.4 55.0 98.8 100.9 52.7
Total Expenditure 3,558 4,197 4,648 6,220 5,644 6,627 7,296 9,334 18,624 28,901
EBITDA 336 472 478 575 369 490 650 859 1,860 2,368
Margins (%) 8.6 10.1 9.3 8.5 6.1 6.9 8.2 8.4 9.1 7.6
Depreciation 72 71 81 88 101 116 145 165 312 527
Interest 50 63 64 39 75 80 60 50 216 265
Other Income 24 79 118 234 221 89 95 105 455 510
PBT before EO expense 239 417 450 681 413 383 540 749 1,787 2,085
Extra-Ord expense 0 0 0 0 0 14 0 0 0 14
PBT 239 417 450 681 413 370 540 749 1,787 2,071
Tax 68 128 108 252 130 64 136 188 556 519
Rate (%) 28.5 30.6 24.1 37.1 31.5 17.4 25.2 25.2 31.1 25.0
MI & Profit/Loss of Asso. Cos. 16 6 10 6 -2 22 49 61 38 130
Reported PAT 155 283 332 423 285 283 355 499 1,193 1,422
Adj PAT 155 283 332 423 285 297 355 499 1,193 1,436
YoY Change (%) NA 409.5 192.6 114.4 74.5 4.8 6.9 50.3 125.2 20.3
Margins (%) 4.0 6.1 6.5 6.2 4.7 4.2 4.5 4.9 5.8 4.6

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 December 2023 Results Preview | Sector: Financials

Financials: Banks and Insurance

3QFY24 earnings estimate (INR b)
3Q YoY QoQ
Earnings growth to moderate; remain watchful on NIMs
PAT (INR b)
FY24E (%) (%) Controlled slippages to aid further AQ improvement
Private Banks
AUBANK 4.2 6.6 4.2  Credit growth steady; unsecured loan growth to moderate across banks:
AXSB 60.8 3.9 3.7 Systemic credit growth remains healthy at 16% for the fortnight ended 15-
BANDHAN 7.9 171.8 9.5 Dec’23 and we expect growth trends for our coverage universe to remain
DCBB 1.3 18.4 6.3
EQUITAS 2.1 20.7 3.6
steady, led by continued momentum in Retail, Business Banking, and recovery in
FB 9.5 17.7 -0.9 the corporate segment. The SME segment has shown robust performance, while
HDFCB 162.4 32.5 1.7 the real estate sector has been witnessing strong activity, with a segmental loan
ICICIBC 99.9 20.1 -2.7 growth of 41% YoY. Among the retail segment, Home loans, Vehicle and Small
IDFCFB 7.8 28.5 3.4
IIB 23.3 18.6 5.8 business segments continue to do well, while unsecured loans are expected to
KMB 33.6 20.3 5.2 witness some moderation in growth amidst RBI’s RWA regulation.
RBK 3.2 51.3 7.5  Deposit growth gains pace, buoyed by elevated rates; NIMs to compress further
Private Total 415.8 23.2 1.6
Systemic deposit growth has improved to 13.3% YoY (fortnight ended 15
PSU Banks
BOB 42.2 9.4 -0.9 Dec’23), driven by higher push for deposit mobilization and aggressive TD rates
CBK 35.3 22.5 -2.1 being offered by banks. This has helped further narrow the gap between credit
INBK 19.4 39.3 -2.2 and deposit growth to ~2.4% in Dec’23. The elevated CD ratios across most
PNB 18.6 196.1 6.1
SBIN 110.2 -22.4 -23.1
private banks, coupled with healthy credit volumes in the seasonally strong
UNBK 35.6 58.5 1.3 second half, will likely sustain high competitive pressure on liabilities. Deposit
PSU Total 261.3 3.6 -11.3 accretion among top lenders such as HDFCB, AXSB, BOB, and IDFCFB will thus be
Banks Total 677.1 14.8 -3.8
a key monitorable and an important factor to determine the loan growth. CASA
Other Financials
SBICARD 6.0 17.8 0.0 ratios are likely to moderate further across banks as deposit churn toward
Paytm -2.6 NA NA higher rate TDs continue. We thus expect systemic NIMs to moderate further
though the pace of moderation is likely to decline vs that in 2QFY24.
 Slippages and credit cost to remain under control: We estimate slippages to
remain under control, while the recovery momentum remains healthy, thus driving
continued improvement in asset quality ratios. Further, restructured book is likely
to moderate, which along with low SMA book will help keep credit costs in check.
 Estimate banking coverage universe earnings to grow ~15%/28% (10%/24%
YoY Ex of HDFCB) in 3QFY24/FY24: We estimate NII for our banking coverage
universe to grow at ~9% YoY (Ex of HDFCB) during 3QFY24, while elevated opex
drags PPoP to a 4% YoY decline (Ex of HDFCB). For 3QFY24, we thus estimate
private/PSU banks to report earnings growth of 23% (18% ex of HDFCB)/4% YoY.
We estimate MOFSL Banking Universe earnings to grow 28% (~24% ex of
HDFCB)/22%/20% YoY over FY24/FY25/26E.

Private Banks – 3QFY24 PAT to grow ~18% YoY (Ex of HDFCB)

 We estimate PPoP growth of 8% YoY (+3% QoQ) (Ex of HDFCB) for our Private
bank coverage universe during 3QFY24, while PAT growth is estimated to
sustain at 18% YoY/1.5% QoQ (Ex of HDFCB). Earnings growth is supported by
robust business growth and controlled credit cost compensating for continued
NIM compression and slightly higher opex. However, we expect the pace of NIM
compression to moderate over 2Q levels.
 We thus estimate 3QFY24 NII growth of 18.5% YoY (15% YoY ex of HDFCB) with
IDFCFB at ~27%, HDFCB at ~27%, KMB at ~15%, ICICIBC at ~12%, IIB at ~18%,
and AXSB at 11% YoY.

Nitin Aggarwal - Research Analyst (Nitin.Aggarwal@MotilalOswal.com)

Research Analyst: Dixit Sankharva (Dixit.sankharva@motilaloswal.com) | Disha Singhal (Disha.Singhal@MotilalOswal.com)
 December 2023 Results Preview | Sector: Financials

 Opex is likely to stay elevated as banks continue with their investments in

branches + technology, while the pace of employee hiring also remains healthy.
 Slippages are likely to remain under control, which should drive continued
improvement in asset quality ratios. This, coupled with healthy recoveries from
NCLT resolutions and the sale of NPA accounts to ARC (Bandhan Bank), will
enable further improvement in asset quality ratios.

PSBs – Elevated Opex + NIM softness to drive earnings moderation

 We estimate PSBs earnings growth to moderate, led by elevated opex and slight
compression in margins. We thus estimate PSBs to report NII growth of 6% YoY,
while PPoP is expected to decline 12% YoY and PAT is expected to grow at
3.6% YoY.
 Opex is likely to remain elevated on the back of the recently concluded wage
negotiations agreed at 17% (higher than expectations of 15%), which would
result in further wage/pension provisioning by PSBs, Federal Bank. Treasury
performance is expected to remain healthy, aided by moderation in bond yields
and strong capital markets.
 Asset quality improvement is likely to continue, with controlled slippages, while
healthy recoveries, upgrades & sale to NARCL aid asset quality ratios. Healthy
PCR and a sharp decline in SMA pool augur well for credit cost.

Small Finance Banks – Mixed performance; NIMs to moderate further

 We estimate AUBANK to report 7% YoY growth in 3QFY24 PAT to INR4.18b
(4.2% QoQ growth) as opex ratios remain elevated (C/I ratio at ~62% for FY24),
while NIMs fall further by 10bp QoQ to 5.4%, after a 22bp decline in 2QFY24.
We remain watchful on asset quality as the bank reported an uptick in credit
cost during 2QFY24, citing normalization in underlying business metrics.
 EQUITASB is likely to report healthy quarter with PPoP/PAT growth of 27%/24%
YoY and ~31% YoY growth in advances (~6% QoQ). However, we estimate
margins to further moderate by another 25bp QoQ to 8.2%.

Payments & Fintech: Macro uncertainty to keep earnings under check

 SBICARDS: The momentum in Credit Card spends and new account sourcing is
likely to remain healthy amid festive demand in 3Q. NIM is expected to see
slight moderation as revolver mix remains sticky at 24%. Asset quality pressures
are likely to continue, keeping credit costs elevated. We thus estimate earnings
to grow 18% YoY/ flat QoQ.
 Paytm: We estimate 3QFY24 GMV to grow 37% YoY to INR4.8t, while the value
of loans disbursed is likely to moderate, given cautionary stance on PL &
Postpaid loans. We expect revenue from operations to grow 32% YoY to
INR27.3b, while contribution profit is estimated to grow 42% YoY to INR14.9b
(contribution margin of ~55%). We estimate Adj. EBITDA to come in at INR2.04b.

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Other monitorables
 Unsecured loan growth and margins: Post the RBI’s move on risk-weights on
unsecured loans, the growth trajectory in unsecured loans and commentary
would be a key thing to watch out. While margins are expected to decline but
colour on residual deposit re-pricing and asset mix would be important to assess
the margin outlook.
 Deposit progression remains a critical business metric, given elevated CD ratios
and recent media reports of RBI asking select banks to improve their CD ratio.
 Opex & Wage provisions: Continued technology spends and investments in
branch expansion/business growth would affect opex run-rate. Shortfall on
residual wage, pension provisioning would be important to assess earnings
growth.
 Fee income traction and treasury performance: The traction in fee income and
treasury performance amidst buoyant capital markets and moderation in bond
yields remain other key focus areas.

Exhibit 1: 3QFY24 earnings estimates

NII (INR m) Operating profit (INR m) Net profit (INR m)
Rating Dec’23 YoY (%) QoQ (%) Dec’23 YoY (%) QoQ (%) Dec’23 YoY (%) QoQ (%)
Financials
AU Small Finance Buy 13,211 14.6 5.8 6,648 19.6 2.6 4,189 6.6 4.2
Axis Bank Buy 1,27,102 10.9 3.2 90,824 -2.1 5.2 60,822 3.9 3.7
Bandhan Bank Neutral 25,794 24.0 5.6 17,395 -9.5 9.9 7,898 171.8 9.5
DCB Bank Neutral 4,908 10.0 3.2 2,299 18.5 9.2 1,348 18.4 6.3
Equitas Small Finance Buy 7,895 21.9 3.1 3,521 26.1 6.6 2,053 20.7 3.6
Federal Bank Buy 21,551 10.2 4.8 13,932 9.3 5.2 9,455 17.7 -0.9
HDFC Bank Buy 2,91,423 26.8 6.4 2,40,169 26.2 5.8 1,62,416 32.5 1.7
ICICI Bank Buy 1,84,917 12.3 1.0 1,41,432 6.6 -0.6 99,851 20.1 -2.7
IDFC First Bank Neutral 41,786 27.2 5.8 16,020 27.1 6.1 7,768 28.5 3.4
IndusInd Bank Buy 52,935 17.8 4.3 40,720 10.5 4.2 23,292 18.6 5.8
Kotak Mahindra Bank Neutral 65,144 15.2 3.5 48,313 25.5 4.8 33,578 20.3 5.2
RBL Bank Neutral 15,205 19.1 3.1 7,840 38.2 7.3 3,161 51.3 7.5
Banks – Private 8,51,871 18.5 4.1 6,29,114 14.0 4.1 4,15,830 23.2 1.6
Banks – Private (Ex of HDFCB) 5,60,447 15 3 3,88,944 8 3 2,53,414 17.8 1.5
Bank of Baroda Buy 1,10,963 2.6 2.5 76,332 -7.3 -4.8 42,151 9.4 -0.9
Canara Bank Buy 92,200 7.2 3.6 73,472 5.7 -3.5 35,287 22.5 -2.1
Indian Bank Buy 58,373 6.1 1.7 40,939 0.8 -4.9 19,449 39.3 -2.2
Punjab National Bank Neutral 1,00,949 10.0 1.7 64,519 12.9 3.8 18,624 196.1 6.1
State Bank of India Buy 4,01,610 5.5 1.7 1,74,095 -31.0 -10.3 1,10,183 -22.4 -23.1
Union Bank Buy 94,232 9.2 3.3 71,227 7.6 -1.4 35,582 58.5 1.3
Banks – PSU 8,58,327 6.2 2.2 5,00,585 -11.9 -5.2 2,61,277 3.6 -11.3
Total Banks 17,10,198 12.0 3.1 11,29,699 0.9 -0.2 6,77,107 14.8 -3.8
Total Banks (Ex of HDFCB) 14,18,775 9 2 8,89,530 -4 -2 5,14,691 10.2 -5.4
SBI Cards Buy 13,527 18.2 4.3 15,778 29.6 1.7 6,000 17.8 0.0
Paytm Buy 27,260 32.1 8.2 2,048 LP -83.9 -2,632 NA NA
For Paytm: NII represents Revenue from operations and PPoP represents Adjusted EBITDA

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Top picks – ICICIBC, IIB and SBI

ICICIBC: Financial snapshot (INR b) ICICIBC (Buy)
Y/E March FY23 FY24E FY25E  ICICIBC has continued to report strong growth and profitability for the past few
NII 621 739 847 years, while also maintaining consistency. The bank increased its PCR to 83% as of
OP 491 567 658
2QFY24. The bank carries Covid-related provisions of INR131b (~1.2% of loans).
NP 319 400 457
NIM (%)
 Slippages have been well under control and have moderated over the past few
4.7 4.7 4.6
EPS (INR) 45.8 57.3 65.4
quarters and are expected to remain under control. ICICIBC is well-cushioned
EPS Gr (%) 36.0 25.1 14.1 with higher provisions on its balance sheet. It is the best in the industry and the
ABV/Sh (INR) 267 315 370 bank does not expect to utilize these provisions in the near term.
Cons. BV/Sh (INR) 306 365 435  Given margins reached their peak in 4QFY23, the re-pricing of liabilities and
Ratios potential CASA cannibalization are likely to drive up funding costs, thereby,
RoE (%) 17.5 18.7 18.2 exerting pressure on margins. ICICI has 70% of its book in a floating rate nature,
RoA (%) 2.1 2.3 2.3 and with much of the re-pricing completed in the past, yields are expected to
Valuations
remain stagnant.
P/BV (x) (Cons) 3.2 2.7 2.3
 The bank is transforming into a growth leader in the SME and Retail segments,
P/ABV (x) 3.0 2.5 2.2
aided by continued investments in technology and partnerships with new
P/E (x) 17.4 13.9 12.2
ecosystem players. We expect a 18% loan CAGR over FY23-26 for the bank.
 ICICIBC has room for re-rating as it continues to deliver robust return ratios and
sustained growth, led by its focus on enhancing core operating performance.
We estimate RoA/RoE of 2.3%/18.2% in FY25. Adjusted for subsidiaries, the
standalone bank trades at 2.2x FY25E ABV.

IIB: Financial snapshot (INR b) IIB (Buy)

Y/E MARCH FY23 FY24E FY25E  Post the slow growth phase over FY20-22 of 10-12%, IIB has seen a growth revival
NII 175.9 207.6 249.6
with loan growth being broad based in both Corporate as well as Retail loans. The
OP 144.2 160.2 194.7
bank’s advances have gained momentum, registering a strong 19-22% YoY growth
NP 74.4 91.1 112.9
for the past four quarters; Corporate growth at 17%+ and Retail exhibiting an
NIM (%) 4.1 4.2 4.4
impressive 25% YoY growth in 2Q. We believe healthy economic outlook and
EPS (INR) 96.0 117.4 145.5
continuous demand from corporates will lead to sustained growth momentum.
EPS Gr. (%) 54.7 22.3 24.0
 The bank has seen gradual improvement in its asset quality, led by moderation
BV/Sh. (INR) 707 809 938
in slippages, particularly from the MFI/Corporate segment, leading to a GNPA of
ABV/Sh. (INR) 691 792 919
Ratios
1.9% and a healthy PCR of ~71% as on 2QFY24. The bank also carries contingent
RoE (%) 14.5 15.5 16.7
provisions amounting to INR15b (48bp of advances) as on 2QFY24.
RoA (%) 1.7 1.8 2.0  Average COD for the bank stands at 6.4%, which is higher than that of its peers,
Valuations but the bank’s ability to sustain its retail deposit base as it steadily optimizes the
P/E (X) 16.4 13.4 10.8 deposit rates will be crucial for aiding margin improvement.CASA ratio for the
P/BV (X) 2.2 1.9 1.7 bank stood at 39.4%, while retail deposits form 44% of total deposits, and this is
P/ABV (X) 2.3 2.0 1.7 expected to improve as the bank continues to ramp up by tapping other
customer segments.
 The bank has maintained its market share of ~2% of net systemic advances,
backed by its leadership position in vehicle finance and MFI, which constitute 26%
and 11% of its advances, respectively, as on 2QFY24. The bank has guided for 18-
23% in PC-6 (FY23-26), which we believe is fairly achievable amid healthy demand
environment. We expect growth momentum to be healthy at 19%+ for FY24-26.
 We thus estimate RoA/RoE of 2.0%/16.7% in FY25. The stock trades at an
attractive valuation of 1.7x FY25E ABV.

January 2024 111

 December 2023 Results Preview | Sector: Financials

SBI: Financial snapshot (INR b) SBI (Buy)

Y/E March FY23 FY24E FY25E
 SBI has delivered a steady 17%/13.3% YoY loan growth in FY23/2QFY24 (vs. 9%
NII 1,448 1,599 1,781
CAGR over FY18-22) while focusing on building a granular and high-quality loan
OP 837 823 1,087
NP 502 555 702
portfolio. It has been witnessing a heathy pick-up in corporate loan growth amid
NIM (%) 3.2 3.1 3.1 improved demand and healthy utilization.
EPS (INR) 56.3 62.2 78.6  SBIN has been steadily growing its deposit base, up 12% YoY to INR46.8t in
EPS Gr. (%) 58.6 10.5 26.4 1HFY24. Despite higher rates being offered by competition, the management
ABV (INR) 311 362 427 does not foresee any challenges in garnering deposits, even at such a large base.
Cons. BV (INR) 385 452 538  Asset quality has remained well under control with constant moderations in
Ratios GNPA/NNPA ratios and overall stress pool. The bank has thus witnessed a
RoE (%) 18.1 17.3 18.9
97bp/16bp YoY decline in GNPA/NNPA to 2.55%/0.64% in 2QFY24.
RoA (%) 1.0 0.9 1.1
 With the cost of deposits largely peaking out, the residual deposit repricing is
Valuations
P/BV (x) (Cons.) 1.7 1.4 1.2
expected to play out in 3QFY24, and should be largely offset by some degree of
P/ABV (x) 1.4 1.2 1.0 MCLR repricing. SBIN has recently increased the TD rates by 25-50bp in shorter-
P/E (x) 7.8 7.0 5.6 tenure buckets, which is not expected to notably impact costs; we have
incorporated a slight moderation of 3-5bp.
 The opex run rate has been high as SBIN made the additional wage hike
provisions, reflecting a 14% wage hike from 10% earlier. The bank has provided
an additional INR39.8b for wage provisions in 2Q. Moreover, the recent
conclusion of the wage settlement by IBA, agreeing to a wage hike of 17%
effective from 1st Nov’22, will necessitate further provisions for wages and
pensions. This is expected to keep opex at elevated levels. We estimate the
opex trajectory to normalize from FY25 onwards; we expect C/I ratio to
normalize to 52% in FY25 and 50% in FY26.
 We estimate FY25 RoA/RoE of 1.1%/18.9%. The stock trades at attractive
valuations of 1.0x FY25E ABV.

Exhibit 2: Loan growth healthy at 20.2% (including HDFC) Exhibit 3: Deposit growth inches up to 14.0%
Loans (INR t) Chg YoY (%) Deposits (INR t) Chg YoY (%)
20.2
20.0
16.4

16.2

14.0
15.0
14.9
14.5

13.2
12.9
13.3
13.3

11.5
11.4
12.0

11.1
10.5
10.3

10.3
10.0
9.9

9.8

9.8
9.8

9.6
9.4

9.4

9.2
9.2
8.9
8.8

7.9
8.6
8.2
7.5

6.6
6.1

6.1
5.6
5.6
5.1
6.3

4QFY22 164.7

3QFY23 177.3
3QFY19 120.3
4QFY19 125.7
1QFY20 126.8
2QFY20 129.1
3QFY20 132.1
4QFY20 135.7
1QFY21 140.8
2QFY21 142.6
3QFY21 147.3
4QFY21 151.1
1QFY22 154.5
2QFY22 156.0
3QFY22 162.4

1QFY23 169.6
2QFY23 170.3

1QFY24 191.5
2QFY24 192.8
3QFY24 197.9
102.7
107.0
109.5
109.3
108.5
115.8
100.4
103.7
103.0

118.9
123.8
126.3
133.1
136.8
143.9
151.5
158.1
93.4
97.7
97.0
97.7

4QFY23 180.4
2QFY21
3QFY21
4QFY21
1QFY22
2QFY22
3QFY22
3QFY19
4QFY19
1QFY20
2QFY20
3QFY20
4QFY20
1QFY21

4QFY22
1QFY23
2QFY23
3QFY23
4QFY23
1QFY24
2QFY24
3QFY24

January 2024 112

 December 2023 Results Preview | Sector: Financials

Exhibit 4: Margins to compress further

PSU Private

4.7 4.7 4.6 4.4

4.1 4.0 4.1 4.1 4.1 4.1 4.2 4.2 4.2 4.2 4.2 4.2 4.1 4.24 4.3 4.2 4.2 4.5 4.2
3.9 3.9 3.9 3.9 4.0 3.9 4.0

3.2 3.2 3.1 3.1 3.0

2.6 2.4 2.6 2.4 2.5 2.6 2.4 2.8 2.6 2.8 2.7 2.7 2.8 3.0 2.6 3.0 3.0 2.9 2.6 2.8 2.84 2.9 2.8 2.8 3.0
3QFY18

4QFY20

3QFY22
2QFY17
3QFY17
4QFY17
1QFY18
2QFY18

4QFY18
1QFY19
2QFY19
3QFY19
4QFY19
1QFY20
2QFY20
3QFY20

1QFY21
2QFY21
3QFY21
4QFY21
1QFY22
2QFY22

4QFY22
1QFY23
2QFY23
3QFY23
4QFY23
1QFY24
2QFY24
3QFY24
Exhibit 5: Earnings progression broadly on track – minor cut for PSU Banks led by SBI
Old Estimates Revised Estimates Introduced % Change
INR b
FY24E FY25E FY24E FY25E FY26E FY24E FY25E
Private Banks
AXSB 254.1 302.1 241.4 302.2 368.9 -5.0% 0.0%
BANDHAN 34.3 44.1 32.9 41.4 49.8 -4.0% -6.2%
DCBB 5.5 6.6 5.4 6.6 7.8 -2.8% -1.0%
HDFCB 628.6 759.5 616.8 743.3 895.1 -1.9% -2.1%
ICICIBC 387.6 440.7 400.1 456.5 532.5 3.2% 3.6%
IDFCFB 32.2 43.4 31.8 40.6 52.7 -1.3% -6.4%
IIB 92.3 118.0 91.1 112.9 138.5 -1.3% -4.3%
KMB 128.5 141.4 135.4 152.0 176.6 5.3% 7.5%
FB 34.6 42.6 37.5 45.1 53.8 8.4% 5.7%
RBK 12.6 16.8 12.6 17.0 22.4 0.5% 0.8%
AUBANK 17.0 22.6 16.8 22.3 30.7 -1.0% -1.6%
EQUITASB 8.3 9.6 8.1 9.7 12.7 -1.6% 1.0%
Total Pvt 1,635.7 1,947.4 1,630.0 1,949.5 2,341.1 -0.3% 0.1%
- YoY growth 28.0% 19.1% 28.0% 19.6% 20.1%
Total Pvt (Ex of HDFCB) 1,007.1 1,187.9 1,013.2 1,206.1 1,446.6 0.6% 1.5%
- YoY growth 20.3% 18.0% 21.8% 19.0% 19.9%
PSU Banks
BOB 172.8 208.4 170.0 203.6 243.9 -1.6% -2.3%
CBK 142.8 171.6 143.5 173.1 207.2 0.5% 0.9%
INBK 81.3 95.7 77.5 96.5 117.0 -4.6% 0.8%
PNB 63.7 101.6 70.3 110.8 160.4 10.4% 9.1%
SBIN 601.3 720.4 554.9 701.5 800.2 -7.7% -2.6%
UNBK 135.2 164.8 139.9 168.1 199.8 3.4% 2.0%
Total PSU 1,197.1 1,462.5 1,156.1 1,453.6 1,728.5 -3.4% -0.6%
- YoY growth 34.9% 22.2% 26.8% 25.7% 18.9%
Total Banks 2,832.8 3,409.9 2,786.1 3,403.0 4,070.3 -1.6% -0.2%
- YoY growth 30.8% 20.4% 27.5% 22.1% 19.6%
Total banks (Ex of HDFCB) 2,204.2 2,650.4 2,169.4 2,659.7 3,175.1 -1.6% 0.4%
- YoY growth 27.8% 20.2% 24.4% 22.6% 19.4%
SBI Cards 24.3 33.2 24.3 33.2 44.4 0.0% 0.0%
Paytm -9.1 - -10.4 -5.5 2.6 NA NA
Source: MOFSL, Company

January 2024 113

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Exhibit 6: Snapshot of additional provision buffers as of 2QFY24

Loans COVID/conting Floating/additi Total As a percentage
As on 2QFY24
(INR b) ent provisions onal provisions provisions of loans (%)
AXSB* 8,973 50.1 67.5 117.6 1.3
Large banks continue to DCBB 373 0.4 - 0.4 0.1
carry additional provision HDFCB 23,312 - - 156 0.7
buffers ICICIBC 11,105 131.0 - 131.0 1.2
IIB 3,155 15.2 - 15.2 0.5
KMB 3,483 3.2 - 3.2 0.1
AUBANK 642 0.07 - 0.07 0.01
*AXSB holds total provisions of INR117.6b, including standard and additional, other than NPA
Source: MOFSL, Company

Exhibit 7: Snapshot of restructured book across banks

Restructured book
(INR b)
Absolute Sep’21 Dec’21 Mar’22 Jun’22 Sep’22 Dec’22 Mar’23 Jun’23 Sep’23
AXSB 17.6 0.66 0.63 0.52 0.45 0.38 0.30 0.22 0.21 0.20
BANDHAN NA 11.18 8.22 5.20 2.35 0.20 NA NA NA NA
DCBB 12.7 6.80 6.81 6.42 6.10 5.45 4.94 4.51 3.97 3.40
HDFCB 51.3 1.50 1.40 1.14 0.76 0.53 0.42 0.31 NA 0.22
Restructured book remains ICICIBC 35.4 1.27 1.19 1.00 0.80 0.70 0.50 0.40 NA 0.32
under control for private IIB 17.0 3.60 3.30 2.60 2.10 1.50 1.25 0.84 0.66 0.54
banks, but it is relatively KMB 5.3 0.54 0.54 0.44 0.39 0.34 0.25 0.22 0.19 0.15
higher for public sector FB 24.2 2.49 2.45 2.44 2.22 2.03 1.81 1.62 1.40 1.30
RBK 6.8 3.66 3.44 3.27 2.90 2.21 1.67 1.21 1.05 0.89
banks
AUBANK 5.1 3.60 3.10 2.50 2.10 1.70 1.40 1.20 1.00 0.80
BOB NA 2.95 2.65 2.44 2.46 2.12 1.87 1.50 1.31 NA
SBIN 208.5 1.24 1.20 1.13 1.00 0.93 0.85 0.80 0.69 0.62
INBK 99.8 5.85 5.09 4.73 4.20 3.90 3.37 2.51 2.19 2.12
PNB NA 2.60 2.76 2.36 2.00 1.80 1.54 1.32 NA NA
UNBK 145.2 3.69 3.32 2.99 2.92 2.60 2.38 2.20 2.00 1.71
CBK NA 2.85 2.78 2.77 2.41 2.09 1.75 NA NA NA
Source: MOFSL, Company

Exhibit 8: SMA book across banks as of 2QFY24

SMA (bp of loans) SMA 0 SMA 1 SMA 2
BOB NA 22bp
BOI NA 10bp 24bp
CBK 11bp 11bp 48bp
INBK NA 39bp 25bp
PNB NA NA 2bp
SBIN NA 10bp 5bp
UNBK 16bp 8bp 28bp
BANDHAN 150bp 110bp 130bp
KMB NA NA 4bp
Source: MOFSL, Company

January 2024 114

 December 2023 Results Preview | Sector: Financials

Exhibit 9: Retail loan growth healthy at 33.1% YoY; Retail Exhibit 10: Credit Card growth robust at ~41% YoY;
mix at 34.0% in Nov’23 Housing/Retail loan growth at ~40.7%/33.1% YoY in Nov’23
Agri Industry Services Retail Retail YoY (%) Housing YoY (%) Credit Card
30% 38.0%

20% 26.0%

10% 14.0%

0% 2.0%

-10% -10.0%
Mar-20

Mar-21

Mar-22

Mar-23
Jul-20

Jul-21

Jul-22

Jul-23
Nov-22
Nov-19

Nov-20

Nov-21

Nov-23

Mar-20

Mar-21

Mar-22

Mar-23
Jul-20

Jul-21

Jul-22

Jul-23
Nov-22
Nov-19

Nov-20

Nov-21

Nov-23
Source: MOFSL, RBI Source: MOFSL, RBI
Exhibit 11: CD ratio stands at 79.9% as of Nov’23 Exhibit 12: Three-year G-Sec yield remains in a narrow range
82.0%
CD Ratio (%) 79.9% Gvt 3 Yr Bond Yield (%)
78.5% 9.0 7.1
7.5
75.0%
6.0
71.5%
4.5
68.0% 3.0
Apr-21

Aug-21

Apr-22

Apr-23
Feb-22

Aug-22

Aug-23
Feb-21

Feb-23
Oct-21
Mar-15

Mar-17

Mar-19

Mar-21

Mar-23

Oct-22

Oct-23
Jul-16

Jul-18

Jun-21

Jun-22

Jun-23
Jul-14

Jul-20

Jul-22

Dec-20

Dec-21

Dec-22

Dec-23
Nov-13

Nov-15

Nov-17

Nov-19

Nov-21

Nov-23

Source: MOFSL, RBI Source: MOFSL, BBG

Exhibit 13: Five-year G-Sec yield declined 9bp in Dec’23 Exhibit 14: 10-year G-Sec yield remained at 7.2% in Dec’23
8.8 Gvt 5 Yr Bond Yield (%) Gvt 10 Yr Bond Yield (%)
8.0
7.1 7.2
7.6 7.5
7.0
6.4 6.5
6.0
5.2
5.5
4.0 5.0
Aug/…

Aug/…

Aug/…

Dec/…
Dec/…

Dec/…

Dec/…
Apr/21

Apr/22

Apr/23
Jun/21

Oct/21

Oct/22

Oct/23
Jun/22

Jun/23
Feb/23
Feb/21

Feb/22
Apr-21

Aug-21

Apr-22

Aug-22

Apr-23

Aug-23
Feb-21

Feb-22

Feb-23
Oct-22
Oct-21

Jun-23

Oct-23
Jun-21

Jun-22

Dec-22
Dec-20

Dec-21

Dec-23

Source: MOFSL, BBG Source: MOFSL, BBG

Exhibit 15: Relative performance – three months (%) Exhibit 16: One-year relative performance (%)
Nifty Index MOFSL Financials Index Nifty Index MOFSL Financials Index
120 130

110 115

100 100

90 85
80
70
Oct-23

Dec-23
Sep-23

Nov-23

Mar-23

Jun-23
Dec-22

Sep-23

Dec-23

Source: MOFSL, Company Source: MOFSL, Company

January 2024 115

 December 2023 Results Preview | Sector: Financials

Exhibit 17: Valuation summary

CMP EPS (INR) P/E (x) P/B (x) RoE (%)
Company (INR) Rating FY23 FY24E FY25E FY23 FY24E FY25E FY23 FY24E FY25E FY23 FY24E FY25E
Financials
Banks-Private
ICICIBC 982 Buy 45.8 57.0 65.5 17.4 14.0 12.2 2.8 2.4 2.1 17.5 18.6 18.3
HDFCB 1,699 Buy 79.3 83.5 100.9 18.8 17.8 14.8 3.0 2.6 2.3 17.0 15.1 16.3
AXSB 1,093 Buy 71.4 79.3 95.9 13.9 12.5 10.4 2.4 2.0 1.7 18.2 17.5 17.7
BANDHAN 242 Neutral 13.6 20.7 26.1 17.8 11.7 9.3 2.0 1.8 1.6 11.9 16.0 17.9
KMB 1,865 Neutral 55.1 68.1 76.5 24.2 19.6 17.4 3.2 2.8 2.4 14.1 15.0 14.6
IIB 1,575 Buy 96.0 118.3 146.8 16.4 13.3 10.7 2.2 1.9 1.7 14.5 15.6 16.8
FB 152 Buy 14.3 16.1 18.8 10.6 9.4 8.1 1.5 1.3 1.1 14.9 14.6 14.9
DCBB 146 Neutral 14.9 17.8 21.3 9.8 8.2 6.9 1.0 0.9 0.8 11.5 12.3 13.2
IDFCFB 86 Neutral 3.8 4.7 6.1 22.7 18.3 14.1 2.2 1.8 1.6 10.4 10.8 11.9
EQUITASB 110 Buy 4.9 7.4 9.0 22.7 15.0 12.2 2.4 2.1 1.8 12.2 14.9 16.0
AUBANK 766 Buy 22.0 25.5 33.9 34.8 30.1 22.6 4.7 4.2 3.5 15.5 14.6 16.8
RBK 281 Neutral 14.7 21.8 28.4 19.1 12.9 9.9 1.2 1.2 1.1 6.7 9.3 11.2
Banks-PSU
SBIN 639 Buy 56.3 63.7 79.7 7.8 6.9 5.5 1.2 1.1 0.9 18.1 15.5 20.1
PNB 97 Neutral 2.3 5.8 9.2 42.6 16.8 10.5 1.1 1.0 1.0 2.8 6.7 9.9
BOB 231 Buy 27.3 33.4 40.2 8.5 6.9 5.7 1.3 1.1 0.9 16.5 17.4 18.0
CBK 444 Buy 58.5 78.7 94.6 7.6 5.6 4.7 1.2 1.0 0.8 17.1 19.6 19.6
UNBK 121 Buy 12.3 19.0 22.2 9.8 6.4 5.4 1.1 1.0 0.9 12.2 16.9 17.5
INBK 416 Buy 42.4 61.9 72.0 9.8 6.7 5.8 1.2 1.0 0.9 13.3 16.9 17.0
Fintech and payments
SBICARD 774 Buy 23.9 25.7 35.1 32.4 30.1 22.0 7.4 6.1 4.9 25.7 22.3 24.5
Paytm 651 Buy -28.0 -14.7 0.0 -23.2 -44.3 -15,684.4 3.2 3.2 3.3 -13.1 -8.1 -4.3

January 2024 116

 December 2023 Results Preview | Sector: Financials

The tables below provide a snapshot of actual and estimated numbers for companies under the MOFSL Coverage
Universe. Highlighted columns indicate the quarter/financial year under review.
AU Small Finance Bank Buy
CMP: INR766 | TP: INR850 (+11%) EPS CHANGE (%): FY24|25: -1.0|-1.6
 Expect margins to compress  CoF and C/I ratios are expected to remain elevated
 Strong investments in the business and widening  Asset quality to recover after a seasonal blip in 1H
geographical reach will continue to aid business growth and
further reduce geographical concentration.
Quarterly Performance (INR m)
FY23 FY24E
FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
Net Interest Income 9,760 10,833 11,527 12,132 12,462 12,490 13,211 13,644 44,253 51,807
% Change (Y-o-Y) 34.8 43.8 40.5 29.5 27.7 15.3 14.6 12.5 36.8 17.1
Other Income 1,592 2,474 2,949 3,331 3,151 4,255 4,083 4,338 10,345 15,827
Total Income 11,352 13,307 14,476 15,463 15,613 16,744 17,294 17,982 54,597 67,634
Operating Expenses 7,411 8,319 8,919 9,753 10,153 10,267 10,646 11,012 34,403 42,078
Operating Profit 3,941 4,988 5,557 5,709 5,461 6,477 6,648 6,970 20,195 25,556
% Change (Y-o-Y) -18.2 27.1 21.2 18.4 38.6 29.9 19.6 22.1 11.3 26.5
Provisions 384 430 326 409 330 1,143 1,101 954 1,548 3,528
Profit before Tax 3,557 4,558 5,231 5,300 5,131 5,334 5,548 6,016 18,646 22,028
Tax 878 1,132 1,302 1,054 1,262 1,315 1,359 1,262 4,367 5,199
Net Profit 2,679 3,426 3,928 4,246 3,869 4,018 4,189 4,753 14,279 16,829
% Change (Y-o-Y) 31.8 23.0 30.1 22.7 44.4 17.3 6.6 11.9 26.4 17.9
Operating Parameters
Deposit (INR b) 546.3 583.4 611.0 693.6 693.2 757.4 798.7 855.3 693.6 855.3
Loan (INR b) 486.5 517.4 556.0 584.2 628.6 641.7 678.4 729.1 584.2 729.1
Deposit Growth (%) 47.6 49.4 38.0 31.9 26.9 29.8 30.7 23.3 31.9 23.3
Loan Growth (%) 43.3 44.4 38.4 26.7 29.2 24.0 22.0 24.8 26.7 24.8
Asset Quality
GNPA (%) 2.0 1.9 1.8 1.7 1.8 1.9 2.0 1.9 1.7 1.9
NNPA (%) 0.6 0.6 0.5 0.4 0.6 0.6 0.6 0.5 0.5 0.5
PCR (%) 71.7 71.1 72.1 75.0 69.0 69.1 70.6 71.8 70.8 71.8

Axis Bank Buy

CMP: INR1093 | TP: INR1,250 (+14%) EPS CHANGE (%): FY24|25: -3.3|-2.0
 Expect credit cost to inch up slightly  Cost ratios are expected to be elevated
 Margin to remain under pressure  Expect business growth to remain healthy
Quarterly Performance (INR b)
FY23 FY24E
FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
Net Interest Income 93.8 103.6 114.6 117.4 119.6 123.1 127.1 130.6 429.5 500.4
% Change (Y-o-Y) 20.9 31.1 32.4 33.1 27.4 18.9 10.9 11.2 29.6 16.5
Other Income 30.0 39.4 46.7 49.0 50.9 50.3 53.0 57.0 165.0 211.2
Total Income 123.8 143.0 161.2 166.4 170.5 173.5 180.1 187.5 594.5 711.6
Operating Expenses 65.0 65.9 68.5 74.7 82.3 87.2 89.3 92.1 273.0 350.8
Operating Profit 58.9 77.2 92.8 91.7 88.1 86.3 90.8 95.5 321.4 360.8
% Change (Y-o-Y) -4.8 30.2 50.6 41.8 49.7 11.9 -2.1 4.1 29.9 12.2
Provisions 3.6 5.5 14.4 3.1 10.3 8.1 9.5 10.0 28.8 38.0
Profit before Tax 55.3 71.7 78.4 88.6 77.8 78.2 81.3 85.4 292.6 322.7
Tax 14.0 18.4 19.9 22.4 19.8 19.5 20.5 21.5 73.3 81.3
Net Profits 41.3 53.3 58.5 66.3 58.0 58.6 60.8 64.0 219.3 241.4
% Change (Y-o-Y) 91.0 70.1 61.9 60.9 40.5 10.0 3.9 -3.5 68.4 10.1
Operating Parameters
Deposit (INR t) 8.0 8.1 8.5 9.5 9.4 9.6 10.1 10.7 9.5 10.7
Loan (INR t) 7.0 7.3 7.6 8.5 8.6 9.0 9.3 9.8 8.5 9.8
Deposit Growth (%) 12.6 10.1 9.9 15.2 17.2 17.9 18.5 13.4 15.2 13.4
Loan Growth (%) 14.0 17.6 14.6 19.4 22.4 22.8 22.5 16.0 19.4 16.0
Asset Quality
Gross NPA (%) 2.8 2.5 2.4 2.0 2.0 1.7 1.7 1.7 2.2 1.7
Net NPA (%) 0.6 0.5 0.5 0.4 0.4 0.4 0.4 0.3 0.4 0.3
PCR (%) 77.3 79.9 80.8 80.9 79.6 79.5 79.7 80.4 80.0 80.4
E: MOFSL Estimates

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 December 2023 Results Preview | Sector: Financials

Bandhan Bank Neutral

CMP: INR242 | TP: INR270 (+11%) EPS CHANGE (%): FY24|25: -1.2|-1.7
 Expect NIM moderation to continue  Expect business growth to pick up
 Expect asset quality to improve and credit cost to be  Cost ratios expected to remain elevated
under control
Quarterly Performance (INR b)
Y/E March FY23 FY24E
FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2QE 3QE 4QE
Net Interest Income 25.1 21.9 20.8 24.7 24.9 24.4 25.8 28.0 92.6 103.2
% Change (YoY) 18.9 13.3 -2.1 -2.7 -0.9 11.4 24.0 13.4 6.3 11.4
Other Income 3.3 4.8 10.3 6.3 3.9 5.4 6.1 7.3 24.7 22.7
Total Income 28.4 26.7 31.1 31.0 28.8 29.8 31.9 35.4 117.3 125.9
Operating Expenses 10.2 11.2 11.9 13.1 13.1 14.0 14.5 15.1 46.4 56.8
Operating Profit 18.2 15.5 19.2 18.0 15.6 15.8 17.4 20.3 70.9 69.1
% Change (YoY) -7.0 -2.0 -1.4 -28.8 -14.2 2.0 -9.5 12.9 -11.5 -2.5
Provisions 6.4 12.8 15.4 7.3 6.0 6.4 6.8 6.3 42.0 25.5
Profit Before Tax 11.8 2.7 3.8 10.6 9.6 9.5 10.6 14.0 28.9 43.6
Tax 2.9 0.6 0.9 2.5 2.4 2.3 2.7 3.4 7.0 10.7
Net Profit 8.9 2.1 2.9 8.1 7.2 7.2 7.9 10.6 21.9 32.9
% Change (YoY) 137.6 NM -66.2 -57.5 -18.7 244.6 171.8 31.3 NM 50.0
Operating Parameters
Deposits (INR b) 931 994 1,023 1,081 1,085 1,121 1,188 1,275 1,081 1,275
Loans (INR b) 909 902 921 1,048 982 1,020 1,104 1,219 1,048 1,219
Deposit Growth (%) 20.3 21.3 21.0 12.2 16.6 12.8 16.1 18.0 12.2 18.0
Loan Growth (%) 21.6 21.1 14.7 11.5 8.0 13.1 19.9 16.3 11.5 16.3
Asset Quality
Gross NPA (%) 7.3 7.2 7.2 4.9 6.8 7.3 5.8 4.9 4.9 4.9
Net NPA (%) 1.9 1.9 1.9 1.2 2.2 2.3 1.8 1.5 1.2 1.5
PCR (%) 74.9 75.5 75.4 76.8 69.2 70.0 70.7 71.2 76.8 71.2
E: MOFSL Estimates

Bank of Baroda Buy

CMP: INR231 | TP: INR280 (+21%) EPS CHANGE (%): FY24|25: -1.6|-2.3
 Expect earnings and business growth to remain healthy  Opex to increase due to branch expansion
 Expect asset quality to improve further; credit cost is likely to Loan growth development and margin trajectory to be key
remain in control monitorables
Quarterly Performance (INR b)
FY23 FY24E
FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
Net Interest Income 88.4 101.7 108.2 115.2 110.0 108.3 111.0 114.6 413.6 443.8
% Change (YoY) 12.0 34.5 26.5 33.8 24.4 6.4 2.6 -0.6 26.8 7.3
Other Income 11.8 18.3 35.5 34.7 33.2 41.7 37.4 38.0 100.3 150.4
Total Income 100.2 120.0 143.7 149.9 143.2 150.0 148.4 152.6 513.8 594.2
Operating Expenses 54.9 59.7 61.4 69.2 64.9 69.8 72.1 75.8 245.2 282.7
Operating Profit 45.3 60.3 82.3 80.7 78.2 80.2 76.3 76.8 268.6 311.6
% Change (YoY) -19.2 6.4 50.1 43.3 72.8 33.0 -7.3 -4.9 20.0 16.0
Provisions 16.8 16.3 24.0 14.2 19.5 21.6 20.0 17.6 71.4 78.7
Profit before Tax 28.4 44.0 58.3 66.5 58.8 58.6 56.4 59.2 197.3 232.9
Tax 6.7 10.9 19.8 18.8 18.1 16.1 14.2 14.5 56.2 62.9
Net Profit 21.7 33.1 38.5 47.8 40.7 42.5 42.2 44.6 141.1 170.0
% Change (YoY) 79.4 58.7 75.4 168.5 87.7 28.4 9.4 -6.5 94.0 20.5
Operating Parameters
Deposit (INR b) 10,327 10,902 11,495 12,037 11,999 12,496 12,937 13,421 12,037 13,421
Loan (INR b) 7,996 8,366 8,907 9,410 9,635 9,980 10,332 10,727 9,410 10,727
Deposit Growth (%) 10.9 13.6 17.5 15.1 16.2 14.6 12.5 11.5 15.1 11.5
Loan Growth (%) 19.6 20.6 21.7 21.1 20.5 19.3 16.0 14.0 21.1 14.0
Asset Quality
Gross NPA (%) 6.3 5.3 4.5 3.8 3.5 3.3 3.1 3.0 3.8 3.0
Net NPA (%) 1.6 1.2 1.0 0.9 0.8 0.8 0.7 0.6 0.9 0.6
PCR (%) 75.9 79.1 78.8 77.2 78.5 77.6 78.4 80.1 76.7 80.1
E: MOFSL Estimates

January 2024 118

 December 2023 Results Preview | Sector: Financials

Canara Bank Buy

CMP: INR444 | TP: INR550 (+24%) EPS CHANGE (%): FY24|25: 0.5|0.9
 Expect business growth to remain steady  Expect cost ratios to remain elevated, while expect margins
to remain broadly stable
 Asset quality and credit cost expected to improve
Quarterly Performance (INR b)
FY23 FY24E
FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
Net Interest Income 67.8 74.3 86.0 86.2 86.7 89.0 92.2 95.5 314.4 363.4
% Change (Y-o-Y) 10.2 18.5 23.8 23.0 27.7 19.8 7.2 10.9 19.1 15.6
Other Income 51.8 48.3 39.9 47.8 48.2 46.3 45.5 49.5 187.6 189.5
Total Income 119.6 122.6 125.9 133.9 134.8 135.4 137.7 145.0 502.0 552.9
Operating Expenses 53.5 53.5 56.3 61.4 58.8 59.2 64.2 69.6 224.8 251.8
Operating Profit 66.1 69.1 69.5 72.5 76.0 76.2 73.5 75.5 277.2 301.1
% Change (Y-o-Y) 20.5 23.2 19.8 16.9 15.1 10.3 5.7 4.1 13.4 8.6
Other Provisions 36.9 36.4 31.2 30.9 27.2 26.1 26.8 28.4 135.4 108.5
Profit before Tax 29.2 32.7 38.3 41.6 48.9 50.1 46.7 47.0 141.7 192.6
Tax 8.9 7.4 9.5 9.8 13.5 14.0 11.4 10.2 35.7 49.1
Net Profit 20.2 25.3 28.8 31.7 35.3 36.1 35.3 36.8 106.0 143.5
% Change (Y-o-Y) 71.7 89.5 91.8 90.5 74.8 42.8 22.5 16.0 86.7 35.3
Operating Parameters
Deposit (INR b) 11,181 11,340 11,635 11,792 11,925 12,322 12,588 12,853 11,792 12,853
Loan ( (INR b) 7,469 7,885 8,164 8,307 8,551 8,923 9,137 9,345 8,307 9,345
Deposit Growth (%) 9.4 9.8 11.5 8.5 6.6 8.7 8.2 9.0 8.5 9.0
Loan Growth (%) 15.2 21.4 18.0 18.1 14.5 13.2 11.9 12.5 18.1 12.5
Asset Quality
Gross NPA (%) 7.0 6.4 5.9 5.4 5.2 4.8 4.5 4.1 5.4 4.1
Net NPA (%) 2.5 2.2 2.0 1.7 1.6 1.4 1.2 1.1 1.7 1.1
PCR (%) 66.2 67.1 68.1 68.9 70.6 71.4 73.3 74.6 68.8 74.6
E: MOFSL Estimates

DCB Bank Neutral

CMP: INR146 | TP: INR150 (3%) EPS CHANGE (%): FY24|25: -2.8|-1.0
 Expect loan book growth to be robust  Asset quality to witness further improvement
 NIM expected to remain stable, while C/I ratio to be closely
 Credit costs to remain broadly stable
monitored
Quarterly Performance (INR m)
FY23 FY24E
FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
Net Interest Income 3,740 4,111 4,460 4,860 4,707 4,757 4,908 5,104 17,170 19,476
% Change (Y-o-Y) 21.1 27.2 29.3 27.7 25.9 15.7 10.0 5.0 26.5 13.4
Other Income 924 992 954 1,223 1,069 1,074 1,206 1,400 4,094 4,749
Total Income 4,664 5,103 5,414 6,083 5,777 5,831 6,114 6,504 21,264 24,225
Operating Expenses 3,002 3,278 3,473 3,643 3,690 3,725 3,815 3,908 13,397 15,138
Operating Profit 1,661 1,826 1,941 2,439 2,087 2,105 2,299 2,596 7,867 9,087
% Change (Y-o-Y) -17.8 4.2 -2.4 10.5 25.6 15.3 18.5 6.4 -1.3 15.5
Provisions 350 310 407 525 377 397 482 585 1,787 1,841
Profit before Tax 1,311 1,516 1,534 1,915 1,709 1,708 1,817 2,011 6,080 7,246
Tax 340 392 396 493 440 441 469 520 1,424 1,869
Net Profit 971 1,124 1,139 1,422 1,269 1,268 1,348 1,491 4,656 5,376
% Change (Y-o-Y) 187.8 73.0 51.1 25.4 30.7 12.9 18.4 4.8 61.9 15.5
Operating Parameters
Deposit (INR b) 350.8 369.6 395.1 412.4 430.1 455.0 470.8 485.4 412.4 485.4
Loan (INR b) 298.1 312.9 329.7 343.8 354.7 372.8 388.4 405.7 343.8 405.7
Deposit Growth (%) 14.6 16.3 22.6 18.9 22.6 23.1 19.2 17.7 18.9 17.7
Loan Growth (%) 17.9 17.9 20.6 18.2 19.0 19.1 17.8 18.0 18.2 18.0
Asset Quality
Gross NPA (%) 4.2 3.9 3.6 3.2 3.3 3.4 3.3 3.2 3.2 3.2
Net NPA (%) 1.8 1.5 1.4 1.0 1.2 1.3 1.3 1.2 1.0 1.2
PCR (%) 57.8 61.3 63.0 68.2 64.1 62.8 63.1 63.4 68.2 63.4
E: MOFSL Estimates

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 December 2023 Results Preview | Sector: Financials

Equitas Small Finance Bank Buy

CMP: INR110 | TP: INR130 (+18%) EPS CHANGE (%): FY24|25: -0.6|-3.4
 NIMs to further moderate  Cost ratios estimated to stay elevated
 Expect further improvement in asset quality ratios  Deposit traction and CASA ratio and rise in deposit cost to be
the key monitorables
Quarterly Performance (INR m)
Y/E March FY23 FY24E
FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
Net Interest Income 5,806 6,097 6,475 7,070 7,431 7,656 7,895 8,098 25,447 31,081
% Change (YoY) 25.9 26.0 19.7 28.0 28.0 25.6 21.9 14.6 24.8 22.1
Other Income 1,332 1,450 1,526 2,387 1,714 1,814 1,916 2,190 6,696 7,633
Total Income 7,138 7,547 8,001 9,456 9,145 9,470 9,811 10,288 32,143 38,714
Operating Expenses 4,456 5,124 5,210 5,593 6,024 6,168 6,290 6,480 20,383 24,961
Operating Profit 2,682 2,423 2,791 3,864 3,121 3,302 3,521 3,808 11,760 13,753
% Change (YoY) 63.1 21.8 24.2 36.1 16.4 36.3 26.1 -1.4 34.9 16.9
Provisions 1,416 901 499 1,256 601 632 777 889 4,072 2,899
Profit before Tax 1,266 1,522 2,292 2,608 2,521 2,670 2,744 2,919 7,688 10,854
Tax 296 358 591 707 609 689 692 743 1,952 2,732
Net Profit 970 1,164 1,701 1,900 1,912 1,982 2,053 2,176 5,736 8,122
% Change (YoY) 713.4 182.6 57.4 59.0 97.1 70.2 20.7 14.5 104.3 41.6
Operating Parameters
AUM (INR b) 217 228 249 279 296 312 330 352 279 352
Deposits (INR b) 204 217 234 254 277 308 326 345 254 345
Loans (INR b) 205 218 233 258 275 288 305 326 258 326
AUM Growth (%) 22 20 27 35 36 37 32 26 35 26
Deposit Growth (%) 19 20 31 34 36 42 39 36 34 36
Loan Growth (%) 22 22 27 33 34 32 31 26 33 26
Asset Quality
Gross NPA (%) 4.1 3.9 3.6 2.8 2.8 2.3 2.1 1.9 2.8 1.9
Net NPA (%) 2.2 2.0 1.8 1.2 1.2 1.0 0.9 0.8 1.2 0.8
PCR (%) 48.5 50.5 50.8 56.9 57.8 57.7 58.6 59.9 56.9 59.9

Federal Bank Buy

CMP: INR152 | TP: INR175 (+15%) EPS CHANGE (%): FY24|25: 2.6|1.3
 Credit growth remains healthy, driven by robust growth from  Deposits traction to be a key monitorable
new businesses and fintech partnerships
 Expect cost ratios to remain elevated; margin expected to  Asset quality metrics to improve further
remain flat
Quarterly Performance (INR b)
FY23 FY24E
FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
Net Interest Income 16.0 17.6 19.6 19.1 19.2 20.6 21.6 22.6 72.3 83.9
% Change (YoY) 13.1 19.1 27.1 25.2 19.6 16.7 10.2 18.1 21.3 16.0
Other Income 4.5 6.1 5.3 7.3 7.3 7.3 8.2 7.4 23.3 30.2
Total Income 20.6 23.7 24.9 26.4 26.5 27.9 29.7 29.9 95.6 114.0
Operating Expenses 10.8 11.6 12.2 13.1 13.5 14.6 15.8 15.7 47.7 59.5
Operating Profit 9.7 12.1 12.7 13.3 13.0 13.2 13.9 14.3 47.9 54.5
% Change (YoY) -14.1 32.9 39.4 67.2 33.8 9.3 9.3 7.0 27.6 13.6
Provisions 1.7 2.7 2.0 1.2 1.6 0.4 1.7 1.1 11.4 4.8
Profit before Tax 8.1 9.4 10.8 12.2 11.5 12.8 12.2 13.2 36.6 49.7
Tax 2.1 2.4 2.7 3.2 2.9 3.3 2.7 3.2 6.5 12.1
Net Profit 6.0 7.0 8.0 9.0 8.5 9.5 9.5 10.0 30.1 37.5
% Change (YoY) 63.5 52.9 54.0 67.0 42.1 35.5 17.7 10.8 59.3 24.7
Operating Parameters
Deposit (INR b) 1,834 1,891 2,014 2,134 2,225 2,329 2,396 2,503 2,134 2,503
Loan (INR b) 1,517 1,612 1,682 1,744 1,835 1,928 1,993 2,083 1,744 2,083
Deposit Growth (%) 8.2 10.0 14.8 17.4 21.3 23.1 19.0 17.3 17.4 17.3
Loan Growth (%) 16.9 20.0 19.5 20.4 21.0 19.6 18.5 19.4 20.4 19.4
Asset Quality
Gross NPA (%) 2.7 2.5 2.4 2.4 2.4 2.3 2.2 2.1 2.4 2.1
Net NPA (%) 0.9 0.8 0.7 0.7 0.7 0.6 0.6 0.6 0.8 0.6
PCR (%) 65.8 68.7 70.4 71.2 71.3 72.3 71.4 71.7 68.4 71.7
E: MOFSL Estimates

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 December 2023 Results Preview | Sector: Financials

HDFC Bank Buy

CMP: INR1,699 | TP: INR2,000 (+18%) EPS CHANGE (%): FY24|25: -1.9|-2.1
 Business traction expected to remain healthy  Margins likely to see slight improvement from the 2Q lows
 Asset quality for the merged entity expected to remain  Business growth and earnings trajectory are key
broadly stable monitorables
Quarterly Performance (INR b)
FY23 FY24
FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
Net Interest Income 194.8 210.2 229.9 233.5 236.0 273.9 291.4 312.7 868.4 1,114.0
% Change (Y-o-Y) 14.5 18.9 24.6 23.7 21.1 30.3 26.8 33.9 20.6 28.3
Other Income 63.9 76.0 85.0 87.3 92.3 107.1 109.6 112.5 312.1 421.4
Total Income 258.7 286.2 314.9 320.8 328.3 380.9 401.0 425.2 1,180.6 1,535.4
Operating Expenses 105.0 112.2 124.6 134.6 140.6 154.0 160.8 167.7 476.5 623.0
Operating Profit 153.7 173.9 190.2 186.2 187.7 226.9 240.2 257.5 704.0 912.3
% Change (Y-o-Y) 1.5 10.0 13.4 13.8 22.2 30.5 26.2 38.3 9.9 29.6
Provisions 31.9 32.4 28.1 26.9 28.6 29.0 29.2 29.6 119.2 116.5
Profit before Tax 121.8 141.5 162.2 159.4 159.1 197.9 210.9 227.9 584.9 795.9
Tax 29.8 35.5 39.6 38.9 39.6 38.1 48.5 52.8 143.8 179.1
Net Profit 92.0 106.1 122.6 120.5 119.5 159.8 162.4 175.1 441.1 616.8
% Change (Y-o-Y) 19.0 20.1 18.5 19.8 30.0 50.6 32.5 45.3 19.3 39.8
Operating Parameters
Deposit 16,048 16,734 17,332 18,834 19,131 21,729 22,747 24,122 18,834 24,122
Loan 13,951 14,799 15,068 16,006 16,157 23,312 24,007 25,099 16,006 25,099
Deposit Growth (%) 19.2 19.0 19.9 20.8 19.2 29.8 31.2 28.1 20.8 28.1
Loan Growth (%) 21.6 23.4 19.5 16.9 15.8 57.5 59.3 56.8 16.9 56.8
Asset Quality
Gross NPA (%) 1.3 1.2 1.2 1.1 1.2 1.3 1.3 1.3 1.1 1.3
Net NPA (%) 0.4 0.3 0.3 0.3 0.3 0.4 0.4 0.3 0.3 0.3
PCR (%) 72.9 73.3 73.2 75.8 73.3 73.3 73.4 73.3 75.8 73.3
E: MOFSL Estimates; * Reported on total assets; # Cal. on interest earning assets

ICICI Bank Buy

CMP: INR982 | TP: INR1,200 (+22%) EPS CHANGE (%): FY24|25: 0.5|-0.2
 Expect loan growth to remain healthy, led by Retail and SME  Expect credit costs to inch up slightly; adequate contingency
segments buffers to add comfort
 Margin trajectory is likely to compress  Traction in opex and deposit growth to be the key
monitorable
Quarterly Performance (INR b)
FY23 FY24E
FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
Net Interest Income 132.1 147.9 164.6 176.7 182.3 183.1 184.9 188.5 621.3 738.8
% Change (YoY) 20.8 26.5 34.6 40.2 38.0 23.8 12.3 6.7 30.9 18.9
Other Income 46.7 50.5 50.2 50.9 54.4 57.8 58.7 59.3 198.3 230.0
Total Income 178.8 198.4 214.9 227.5 236.6 240.8 243.6 247.8 819.6 968.8
Operating Expenses 75.7 81.6 82.2 89.3 95.2 98.6 102.1 106.2 328.7 402.2
Operating Profit 103.1 116.8 132.7 138.3 141.4 142.3 141.4 141.6 490.9 566.7
% Change (YoY) 15.9 17.8 30.8 34.3 37.2 21.8 6.6 2.4 25.1 15.4
Provisions 11.4 16.4 22.6 16.2 12.9 5.8 8.8 7.0 66.7 34.6
Profit before Tax 91.7 100.4 110.1 122.1 128.5 136.5 132.6 134.5 424.2 532.1
Tax 22.6 24.8 27.0 30.8 32.0 33.9 32.8 33.4 105.2 131.9
Net Profit 69.0 75.6 83.1 91.2 96.5 102.6 99.9 101.2 319.0 400.1
% Change (YoY) 49.6 37.1 34.2 30.0 39.7 35.8 20.1 10.9 36.7 25.4
Operating Parameters
Deposit 10,503 10,900 11,220 11,808 12,387 12,947 13,381 13,934 11,808 13,934
Loan 8,956 9,386 9,740 10,196 10,576 11,105 11,573 12,083 10,196 12,083
Deposit Growth (%) 13.4 11.5 10.3 10.9 17.9 18.8 19.3 18.0 10.9 18.0
Loan Growth (%) 21.3 22.7 19.7 18.7 18.1 18.3 18.8 18.5 18.7 18.5
Asset Quality
Gross NPA (%) 3.4 3.2 3.1 2.8 2.8 2.5 2.5 2.4 2.9 2.4
Net NPA (%) 0.7 0.6 0.6 0.5 0.5 0.4 0.4 0.5 0.5 0.5
PCR (%) 79.9 81.3 82.6 83.5 83.1 83.1 82.8 81.2 82.8 81.2
E: MOFSL Estimates

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 December 2023 Results Preview | Sector: Financials

IDFC First Bank Neutral

CMP: INR86 | TP: INR95 (10%) EPS CHANGE (%): FY24|25: 0.7|-1.8
 Expect loan growth to remain healthy, led by Retail and  Asset quality to remain healthy, with credit cost under
Commercial Finance control
 Traction in deposit growth and movement in cost ratios to be Margins expected to see some moderation, but commentary
in focus to be monitorable
Quarterly Performance (INR b)
FY23 FY24E
FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
Net Interest Income 27.5 30.0 32.9 36.0 37.5 39.5 41.8 43.9 126.4 162.6
% Change (Y-o-Y) 25.9 32.1 27.3 34.7 36.1 31.6 27.2 21.9 30.2 28.7
Other Income 8.6 10.6 11.5 14.0 14.1 14.3 15.0 15.6 44.7 59.0
Total Income 36.1 40.6 44.4 49.9 51.6 53.8 56.8 59.4 171.0 221.6
Operating Expenses 26.6 28.9 31.8 34.4 36.6 38.7 40.7 41.3 121.7 157.3
Operating Profit 9.4 11.7 12.6 15.6 15.0 15.1 16.0 18.1 49.3 64.2
% Change (Y-o-Y) -5.1 68.7 63.8 88.6 59.0 29.2 27.1 16.3 50.2 30.3
Provisions 3.1 4.2 4.5 4.8 4.8 5.3 5.6 5.9 16.6 21.6
Profit before Tax 6.4 7.4 8.1 10.8 10.2 9.8 10.4 12.2 32.7 42.7
Tax 1.6 1.9 2.1 2.7 2.6 2.3 2.6 3.3 8.3 10.8
Net Profit 4.7 5.6 6.0 8.0 7.7 7.5 7.8 8.9 24.4 31.8
% Change (Y-o-Y) NM 266.1 115.1 134.2 61.3 35.2 28.5 11.0 NM 30.6
Operating Parameters
Deposit (INR b) 1,133 1,234 1,330 1,446 1,544 1,712 1,792 1,895 1,446 1,895
Deposit Growth (%) 24.1 36.8 43.4 36.9 36.2 38.7 34.7 31.0 36.9 31.0
Loan (INR b) 1,326 1,402 1,471 1,564 1,674 1,792 1,865 1,919 1,518 1,919
Loan Growth (%) 22.0 37.1 26.4 26.0 26.3 27.8 26.8 22.7 28.8 26.4
Asset Quality
Gross NPA (%) 3.4 3.2 3.0 2.5 2.2 2.1 2.1 2.0 2.6 2.1
Net NPA (%) 1.3 1.1 1.0 0.9 0.7 0.7 0.7 0.6 0.9 0.6
PCR (%) 62.0 66.3 66.0 66.4 68.1 68.1 68.6 68.5 66.4 68.5
E: MOFSL Estimates

IndusInd Bank Buy

CMP: INR1,575 | TP: INR1,850 (+17%). EPS CHANGE (%): FY24|25: -0.8|-09
 Expect loan growth to remain healthy; deposit traction  Expect asset quality to remain broadly stable
would be closely monitored
 Expect margins to be stable  Credit cost to witness a gradual moderation as PCR remains
healthy
Quarterly Performance (INR b)
FY23 FY24E
FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
Net Interest Income 41.3 43.0 45.0 46.7 48.7 50.8 52.9 55.2 175.9 207.6
% Change (YoY) 15.8 17.6 18.5 17.2 18.0 18.0 17.8 18.2 17.3 18.0
Other Income 19.3 20.1 20.8 21.5 22.1 22.8 23.4 24.0 81.7 92.4
Total Income 60.6 63.1 65.7 68.2 70.8 73.6 76.3 79.2 257.6 299.9
Operating Expenses 26.3 27.7 28.9 30.7 32.5 34.5 35.6 37.1 113.5 139.7
Operating Profit 34.3 35.4 36.9 37.6 38.3 39.1 40.7 42.1 144.2 160.2
% Change (YoY) 9.9 10.0 11.3 11.2 11.7 10.3 10.5 12.1 10.6 11.1
Provisions 12.5 11.4 10.6 10.3 9.9 9.7 9.6 9.4 44.9 38.6
Profit before Tax 21.8 24.0 26.2 27.3 28.4 29.3 31.1 32.7 99.3 121.6
Tax 5.5 6.0 6.6 6.8 7.2 7.3 7.8 8.2 24.9 30.5
Net Profit 16.3 18.1 19.6 20.4 21.2 22.0 23.3 24.5 74.4 91.1
% Change (YoY) 60.5 57.4 58.2 45.9 30.3 22.0 18.6 20.0 54.9 22.4
Operating Parameters
Deposit (INR b) 3,031 3,155 3,253 3,361 3,470 3,595 3,719 3,899 3,361 3,899
Loan (INR b) 2,480 2,601 2,728 2,899 3,013 3,155 3,297 3,467 2,899 3,467
Deposit Growth (%) 13.4 14.6 14.3 14.6 14.5 13.9 14.3 16.0 14.6 16.0
Loan Growth (%) 17.7 17.8 19.3 21.3 21.5 21.3 20.9 19.6 21.3 19.6
Asset Quality
Gross NPA (%) 2.4 2.1 2.1 2.0 1.9 1.9 1.9 1.8 2.0 1.8
Net NPA (%) 0.7 0.6 0.6 0.6 0.6 0.6 0.6 0.5 0.6 0.5
PCR (%) 72.0 71.5 70.6 70.6 70.6 70.6 70.8 71.0 69.4 71.0
E: MOFSL Estimates

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Indian Bank Buy

CMP: INR416 | TP: INR525 (+26%) EPS CHANGE (%): FY24|25: -3.3|-0.5
 Expect loan growth to remain healthy  Earnings growth to remain on track
 Margin outlook to remain a key monitorable  Asset quality ratios to improve and credit costs to witness a
gradual moderation
Quarterly Performance (INR b)
Y/E March FY23 FY24E
FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
Net Interest Income 45.3 46.8 55.0 55.1 57.0 57.4 58.4 59.6 202.3 232.4
% Change (YoY) 13.5 14.7 25.1 29.5 25.8 22.5 6.1 8.2 20.9 14.9
Other Income 16.0 18.3 17.2 19.9 17.1 19.9 19.4 20.8 71.4 77.1
Total Income 61.4 65.1 72.2 75.0 74.1 77.3 77.7 80.3 273.7 309.5
Operating Expenses 25.7 28.8 31.5 34.9 32.8 34.3 36.8 39.1 121.0 143.0
Operating Profit 35.6 36.3 40.6 40.2 41.3 43.0 40.9 41.2 152.7 166.6
% Change (YoY) 4.3 10.8 23.5 46.7 16.0 18.6 0.8 2.7 20.1 9.1
Provisions 22.2 20.6 25.2 25.6 17.4 15.5 15.3 14.7 93.6 62.9
Profit before Tax 13.5 15.7 15.5 14.5 23.9 27.5 25.7 26.6 59.1 103.7
Tax 1.3 3.5 1.5 0.1 6.9 7.6 6.2 5.4 6.3 26.1
Net Profit 12.1 12.3 14.0 14.5 17.1 19.9 19.4 21.1 52.8 77.5
% Change (YoY) 2.7 12.5 102.4 47.0 40.8 62.2 39.3 46.0 33.9 46.8
Operating Parameters
Deposits (INR b) 5,843 5,889 5,971 6,212 6,291 6,408 6,555 6,740 6,212 6,740
Loans (INR b) 4,018 4,121 4,361 4,493 4,570 4,706 4,829 5,010 4,493 5,010
Asset Quality
Gross NPA (%) 8.1 7.3 6.5 6.0 5.5 5.0 4.7 4.4 6.0 4.4
Net NPA (%) 2.1 1.5 1.0 0.9 0.7 0.6 0.6 0.6 0.9 0.6
PCR (%) 75.5 80.7 85.5 85.7 87.8 88.5 88.3 87.6 85.7 87.6
E: MOFSL Estimates

Kotak Mahindra Bank Neutral

CMP: INR1,865 | TP: INR2,000 (+7%) EPS CHANGE (%): FY24|25: 0.4|0.5
 Expect steady traction in loan growth  Expect liability growth to remain healthy
 Margins to compress further  Asset quality to remain in control
Quarterly Performance (INR b)
Y/E March FY23 FY24E
FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
Net Interest Income 47.0 51.0 56.5 61.0 62.3 63.0 65.1 66.5 215.5 257.0
% Change (Y-o-Y) 19.2 26.8 30.4 35.0 32.7 23.5 15.2 9.0 28.1 19.2
Other Income 12.4 18.3 19.5 21.9 26.8 23.1 24.1 25.8 70.8 99.9
Total Income 59.4 69.3 76.0 82.9 89.2 86.1 89.2 92.4 286.3 356.8
Operating Expenses 31.6 33.6 37.5 36.4 39.7 40.0 40.9 41.7 137.9 162.3
Operating Profit 27.8 35.7 38.5 46.5 49.5 46.1 48.3 50.6 148.5 194.5
% Change (Y-o-Y) -3.7 14.3 42.5 39.1 77.8 29.2 25.5 9.0 23.2 31.0
Provisions 0.2 1.4 1.5 1.5 3.6 3.7 3.8 3.9 4.6 15.0
Profit before Tax 27.6 34.3 37.0 45.0 45.9 42.4 44.5 46.7 143.9 179.5
Tax 6.9 8.5 9.1 10.0 11.3 10.5 11.0 11.4 34.5 44.2
Net Profit 20.7 25.8 27.9 35.0 34.5 31.9 33.6 35.4 109.4 135.4
% Change (Y-o-Y) 26.1 27.0 31.0 26.3 66.7 23.6 20.3 1.2 27.6 23.8
Deposits (INRb) 3,165 3,252 3,447 3,631 3,863 4,010 4,149 4,270 3,631 4,270
Loans (INRb) 2,802 2,940 3,107 3,199 3,286 3,483 3,622 3,749 3,199 3,749
Deposit growth (%) 10.4 11.5 12.9 16.5 22.0 23.3 20.4 17.6 16.5 17.6
Loan growth (%) 28.8 25.1 22.9 17.9 17.3 18.5 16.6 17.2 17.9 17.2
Asset Quality
Gross NPA (%) 2.24 2.08 1.90 1.78 1.77 1.72 1.63 1.60 1.78 1.60
Net NPA (%) 0.62 0.55 0.43 0.37 0.40 0.37 0.34 0.33 0.37 0.33
PCR (%) 72.6 73.7 77.6 79.3 78.0 79.1 79.4 79.8 79.3 79.8
E: MOFSL Estimates

January 2024 123

 December 2023 Results Preview | Sector: Financials

Punjab National Bank Neutral

CMP: INR97 | TP: INR90 (-7%) EPS CHANGE (%): FY24|25: 10.5|9.1
 Expect loan growth to remain steady; rise in opex to be  Margins likely to moderate
monitored
 Expect asset quality to improve  Increase in wage provisions and RoA remain the key
monitorables
Quarterly Performance (INR b)
Y/E March FY23 FY24E
FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
Net Interest Income 75.4 82.7 91.8 95.0 95.0 99.2 100.9 103.8 344.9 399.0
% Change (YoY) 4.3 30.2 17.6 30.0 26.0 20.0 10.0 9.3 20.2 15.7
Other Income 25.4 28.5 33.4 34.2 34.3 30.3 34.2 35.9 121.4 134.8
Total Income 100.8 111.2 125.2 129.2 129.4 129.5 135.2 139.7 466.3 533.8
Operating Expenses 47.0 55.5 68.0 70.5 69.7 67.3 70.7 71.6 241.1 279.3
Operating Profit 53.8 55.7 57.2 58.7 59.7 62.2 64.5 68.1 225.3 254.5
% Change (YoY) -15.9 38.4 12.6 11.4 10.9 11.7 12.9 16.1 8.5 13.0
Provisions 47.9 49.1 47.1 38.3 39.7 34.4 35.4 35.1 182.4 144.6
Profit before Tax 5.9 6.6 10.0 20.4 20.0 27.7 29.1 33.1 42.9 109.9
Tax 2.8 2.5 3.7 8.8 7.5 10.2 10.5 11.5 17.8 39.6
Net Profit 3.1 4.1 6.3 11.6 12.6 17.6 18.6 21.6 25.1 70.3
% Change (YoY) -69.9 -62.8 -44.2 474.9 307.0 327.0 196.1 86.5 -27.5 180.6
Operating Parameters
Deposits 11,367 11,935 12,104 12,812 12,979 13,099 13,443 13,798 12,812 13,798
Loans 7,426 7,734 8,004 8,308 8,637 8,899 9,126 9,330 8,308 9,330
Deposit Growth (%) 3.6 7.0 7.4 11.8 14.2 9.8 11.1 7.7 11.8 7.7
Loan Growth (%) 12.3 14.9 15.5 14.1 16.3 15.1 14.0 12.3 14.1 12.3
Asset Quality
Gross NPA (%) 11.3 10.5 9.8 8.7 7.7 7.0 6.2 5.7 8.7 5.7
Net NPA (%) 4.3 3.8 3.3 2.7 2.0 1.5 1.2 1.1 2.8 1.1
PCR (%) 64.8 66.3 68.5 70.8 75.8 80.0 82.0 81.9 69.6 81.9

RBL Bank Neutral

CMP: INR281 | TP: INR275 (-2%) EPS CHANGE (%): FY24|25: -3.3 |-0.5
 Expect earnings to improve, driven by lower provisions  Expect improvement in asset quality and liability growth
 Loan growth is likely to remain healthy, supported by new  Margin and credit cost outlook will be the key monitorables
products
Quarterly Performance (INR m)
FY23 FY24E
FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
Net Interest Income 11,890 11,743 12,770 13,570 14,222 14,750 15,205 15,826 49,973 60,002
% Change (Y-o-Y) 22.6 28.3 26.4 19.9 19.6 25.6 19.1 16.6 24.1 20.1
Other Income 6,136 5,833 6,184 6,741 6,854 7,044 7,386 7,344 24,894 28,629
Total Income 18,026 17,576 18,954 20,311 21,076 21,794 22,591 23,170 74,867 88,631
Operating Expenses 12,735 12,453 13,282 14,373 14,601 14,484 14,751 14,966 52,843 58,802
Operating Profit 5,291 5,124 5,672 5,938 6,475 7,310 7,840 8,203 22,025 29,828
% Change (Y-o-Y) -30.9 -25.9 -10.1 -9.7 22.4 42.7 38.2 38.2 -19.8 35.4
Provisions 2,530 2,415 2,927 2,347 2,662 6,404 3,614 3,240 10,219 15,919
Profit before Tax 2,761 2,709 2,745 3,591 3,813 906 4,226 4,964 11,805 13,910
Tax 750 693 655 880 932 -2,035 1,065 1,313 2,978 1,275
Net Profit 2,012 2,016 2,090 2,711 2,881 2,941 3,161 3,651 8,827 12,634
% Change (Y-o-Y) NM NM 33.9 37.0 43.2 45.9 51.3 34.7 NM 43.1
Operating Parameters
Deposit (INR b) 792.2 794.0 817.5 848.9 856.4 897.8 940.6 997.4 848.9 997.4
Loan (INR b) 602.7 629.4 666.8 702.1 730.9 763.2 796.1 842.5 702.1 842.5
Deposit Growth (%) 6.4 5.0 11.0 7.4 8.1 13.1 15.1 17.5 7.4 17.5
Loan Growth (%) 6.6 12.4 14.7 17.0 21.3 21.3 19.4 20.0 17.0 20.0
Asset Quality
Gross NPA (%) 4.1 3.8 3.6 3.4 3.2 3.1 3.0 2.9 3.4 2.9
Net NPA (%) 1.2 1.3 1.2 1.1 1.0 0.8 0.8 0.7 1.1 0.7
PCR (%) 72.5 67.8 68.0 68.1 69.6 75.6 75.3 75.4 68.1 75.4
E: MOFSL Estimates

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 December 2023 Results Preview | Sector: Financials

State Bank of India Buy

CMP: INR639 | TP: INR800 (+25%) EPS CHANGE (%): FY24|25: -7.7|-2.6
 Higher opex due to increased investment  Asset quality to improve further, supported by low stressed
 Expect earnings to decline due to higher wage provisions asset pool
 Margin and provisions to be the key monitorables
Quarterly Performance (INR b)
Y/E March FY23 FY24E FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
Net Interest Income 312.0 351.8 380.7 403.9 389.0 395.0 401.6 413.1 1,448.4 1,598.8
% Change (YoY) 12.9 12.8 24.1 29.5 24.7 12.3 5.5 2.3 20.0 10.4
Other Income 23.1 88.7 114.7 139.6 120.6 107.9 111.8 133.4 366.2 473.8
Total Income 335.1 440.6 495.4 543.5 509.7 502.9 513.4 546.6 1,814.6 2,072.6
Operating Expenses 207.6 229.4 243.2 297.3 256.7 308.7 339.3 345.1 977.4 1,249.8
Operating Profit 127.5 211.2 252.2 246.2 253.0 194.2 174.1 201.5 837.1 822.7
% Change (YoY) -32.8 16.8 36.2 24.9 98.4 -8.1 -31.0 -18.2 11.2 -1.7
Provisions 43.9 30.4 57.6 33.2 25.0 1.2 27.2 26.6 165.1 80.0
Exception items (exp) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Profit before Tax 83.6 180.8 194.6 213.1 228.0 193.0 146.9 174.9 672.1 742.8
Tax Provisions 22.9 48.2 52.5 46.1 59.1 49.7 36.7 42.4 169.7 187.9
Net Profit 60.7 132.6 142.1 166.9 168.8 143.3 110.2 132.5 502.3 554.9
% Change (YoY) -6.7 73.9 68.5 83.2 178.2 8.0 -22.4 -20.6 58.6 10.5
Operating Parameters
Deposits (INR t) 40.5 41.9 42.1 44.2 45.3 46.9 48.0 49.5 44.2 49.5
Loans (INR t) 28.2 29.5 30.6 32.0 32.4 33.5 34.8 36.3 32.0 36.3
Deposit Growth (%) 8.7 10.0 9.5 9.2 12.0 11.9 14.0 11.8 9.2 11.8
Loan Growth (%) 15.8 20.8 18.6 17.0 14.9 13.3 13.9 13.5 17.0 13.5
Asset Quality
Gross NPA (%) 3.9 3.5 3.1 2.8 2.8 2.6 2.4 2.2 2.8 2.2
Net NPA (%) 1.0 0.8 0.8 0.7 0.7 0.6 0.6 0.5 0.7 0.5
PCR (%) 75.1 77.9 76.1 76.4 74.8 75.4 75.2 76.8 76.2 76.8
E: MOFSL Estimates
Union Bank of India Buy
CMP: INR121 | TP: INR150 (+24%) EPS CHANGE (%): FY24|25: 3.5|2.0
 Expect steady traction in loan growth  Margins expected to compress sequentially
 SMA and restructuring books are key monitorables  Expect steady improvement in asset quality
Quarterly Performance (INR b)
FY23 FY24E FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
Net Interest Income 75.8 83.1 86.3 82.5 88.4 91.3 94.2 97.3 327.7 371.2
% Change (YoY) 8.1 21.6 20.3 21.9 16.6 9.9 9.2 18.0 17.9 13.3
Other Income 28.2 32.8 32.7 52.7 39.0 37.0 36.0 37.3 146.3 149.3
Total Income 104.0 115.8 119.0 135.2 127.4 128.2 130.2 134.6 474.0 520.5
Operating Expenses 49.5 50.0 52.8 67.0 55.6 56.0 59.0 61.7 219.3 232.4
Operating Profit 54.5 65.8 66.2 68.2 71.8 72.2 71.2 72.9 254.7 288.1
% Change (YoY) 5.1 8.3 29.8 23.6 31.8 9.8 7.6 6.8 16.4 13.1
Provisions 32.8 40.8 30.4 29.4 20.1 17.7 18.9 19.6 133.3 76.2
Profit before Tax 21.7 25.0 35.8 38.9 51.7 54.5 52.3 53.3 121.4 211.9
Tax 6.1 6.5 13.4 11.1 19.4 19.4 16.7 16.5 37.0 72.0
Net Profit 15.6 18.5 22.4 27.8 32.4 35.1 35.6 36.8 84.3 139.9
% Change (YoY) 32.0 21.1 106.8 93.3 107.7 90.0 58.5 32.3 61.2 65.8
Operating Parameters
Deposit (INR b) 9,928 10,433 10,650 11,177 11,281 11,376 11,780 12,105 11,177 12,105
Loan (INR b) 6,764 7,275 7,564 7,618 7,705 8,036 8,198 8,510 7,618 8,510
Deposit Growth (%) 9.3 14.1 13.6 8.3 13.6 9.0 10.6 8.3 8.3 8.3
Loan Growth (%) 15.7 25.2 22.6 15.3 13.9 10.5 8.4 11.7 15.3 11.7
Asset Quality
Gross NPA (%) 10.2 8.5 7.9 7.5 7.3 6.4 5.9 5.4 7.5 5.4
Net NPA (%) 3.3 2.6 2.1 1.7 1.6 1.3 1.1 1.0 1.8 1.0
PCR (%) 69.9 70.6 74.6 78.8 79.8 80.7 81.5 82.4 78.1 82.4
E: MOFSL Estimates

January 2024 125

 December 2023 Results Preview | Sector: Financials

SBI Cards and Payment Services Buy

CMP: INR774 | TP: INR900 (+16%) EPS CHANGE (%): FY24|25: 0|0
 Cost ratios to remain elevated  Asset quality ratios are likely to be stable
 Spends growth to remain healthy  Revolver mix and margin outlook remain key monitorables
Quarterly Performance (INR b)
FY23 FY24 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
Net Interest Income 10.8 11.2 11.4 11.7 12.3 13.0 13.5 14.2 53.0
% Change (Y-o-Y) 16.7 21.5 14.9 16.7 14.3 16.1 18.2 22.1 20.5
Other Income 18.8 19.7 20.5 22.4 22.4 23.2 24.5 26.2 96.4
Total Income 29.5 30.9 31.9 34.1 34.8 36.2 38.1 40.5 149.4
Operating Expenses 16.6 18.3 19.7 19.8 19.6 20.7 22.3 24.8 87.4
Operating Profit 12.9 12.5 12.2 14.3 15.2 15.5 15.8 15.6 62.1
% Change (Y-o-Y) 22.5 18.3 6.4 22.0 17.3 23.9 29.6 9.3 19.6
Provisions 4.5 5.5 5.3 6.3 7.2 7.4 7.7 7.1 29.4
Profit before Tax 8.4 7.1 6.8 8.0 8.0 8.1 8.1 8.5 32.6
Tax 2.1 1.8 1.7 2.0 2.0 2.1 2.1 2.2 8.3
Net Profit 6.3 5.3 5.1 6.0 5.9 6.0 6.0 6.4 24.3
% Change (Y-o-Y) 105.8 52.4 32.1 2.7 -5.4 14.7 17.8 6.7 7.7
Operating Parameters
Loan (INRb) 320.8 365.0 373.5 393.6 418.1 435.6 466.4 494.8 494.8
Loan Growth (%) 39.2 43.7 33.6 30.4 30.3 19.3 24.9 25.7 25.7
Asset Quality
Gross NPA (%) 2.2 2.1 2.2 2.4 2.4 2.4 2.4 2.4 2.4
Net NPA (%) 0.8 0.8 0.8 0.9 0.9 0.9 0.9 0.8 0.8
PCR (%) 65.1 64.0 64.2 63.6 63.8 64.1 64.6 65.3 65.3
E: MOFSL Estimates; * Reported on total assets; # Cal. on interest earning assets
Paytm Buy
CMP: INR651 | TP: INR900 (+38%) Adj EBITDA CHANGE (%): FY24|25: -15|-40
 Expect operating profitability to increase, driven by  Expect healthy growth in total revenue
improvement in contribution margin on a sequential basis
 Expect decline in disbursements and GMV  Expect the number of subscription payment devices to grow
Quarterly Performance (INR b)
FY23 FY24E
FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
Payment Services to Consumers 5.2 5.5 5.1 5.2 5.5 5.8 6.1 6.4 21.1 23.9
Payment Services to Merchants 5.6 6.2 6.4 9.2 8.4 9.2 9.8 10.6 27.4 38.0
Financial Services and Others 2.7 3.5 4.5 4.8 5.2 5.7 6.1 5.5 15.4 22.5
Payment and Financial Services 13.5 15.2 16.0 19.2 19.2 20.7 22.0 24.5 63.8 86.4
% Change (Y-o-Y) 95.4 80.6 43.2 58.6 42.4 36.1 37.5 28.0 65.5 35.3
Commerce 1.4 1.3 1.9 1.7 1.6 1.6 2.1 2.3 6.2 7.6
Cloud 1.9 2.5 2.4 2.3 2.5 2.6 2.8 2.4 9.0 10.3
Commerce and Cloud Services 3.3 3.8 4.2 3.9 4.1 4.2 4.9 4.7 15.2 17.9
% Change (Y-o-Y) 64.8 54.6 23.8 22.7 22.0 12.5 17.5 20.1 37.6 18.0
Revenue from Operations 16.8 19.1 20.6 23.4 23.4 25.2 27.3 29.6 79.9 105.5
% Change (Y-o-Y) 88.7 76.2 41.7 51.5 39.3 31.6 32.1 26.7 60.6 32.0
Direct Expenses 9.5 10.7 10.2 10.5 10.4 10.9 12.4 12.9 40.9 46.6
Contribution Profit 7.3 8.4 10.5 12.8 13.0 14.3 14.9 16.7 39.0 58.8
% Change (Y-o-Y) 197.4 223.4 131.0 138.1 79.3 69.2 41.9 29.9 160.4 50.9
Indirect Expenses 10.0 10.1 10.2 10.5 12.2 12.7 12.8 13.1 40.8 50.8
Adjusted EBITDA -2.7 -1.7 0.3 2.3 0.8 1.5 2.0 3.6 -1.8 8.0
EBITDA -6.3 -5.4 -3.3 -1.3 -2.9 -2.3 -1.8 -0.4 -16.3 -7.5
PAT -6.4 -5.7 -3.9 -1.7 -3.6 -2.9 -2.6 -1.4 -17.8 -10.4
% Change (Y-o-Y) 68.5 20.4 -49.6 -77.9 -44.5 -48.9 -32.9 -18.3 -25.9 -41.2
Operating Parameters
GMV (INRt) 3.0 3.2 3.5 3.6 4.1 4.5 4.8 4.6 13.2 18.0
Disbursements (INR b) 55.5 73.1 99.6 125.5 148.5 162.1 126.4 164.4 353.8 601.4
GMV Growth (%) 101.5 62.6 38.4 39.8 36.8 41.5 39.2 27.5 55.2 36.0
Disbursements Growth (%) 778.8 481.8 356.6 253.3 167.3 121.7 27.0 31.0 364.2 70.0
Asset Quality
Contribution Margin 43.3 44.0 50.8 55.0 55.7 56.6 54.6 56.3 48.8 55.8
Adjusted EBITDA Margin (%) -16.3 -8.7 1.5 10.0 3.6 6.1 7.5 12.1 -2.2 7.6
EBITDA Margin (%) -37.7 -28.1 -16.0 -5.5 -12.5 -9.2 -6.7 -1.5 -20.4 -7.1
E: MOFSL Estimates

January 2024 126

 December 2023 Results Preview | Sector: Financials - NBFCs

Financials - NBFCs
Healthy profitability despite NIM restraint from rising CoF
3QFY24 earnings estimate (INR b) Mortgages and gold loans yet to fully recover; minor improvement in asset quality
YoY QoQ
PAT (INR b) 3QFY24
(%) (%)
 Robust credit demand leading to healthy AUM growth: We expect ~8% YoY
HFC growth in AUM for our coverage HFCs, including both affordable and other HFCs.
LICHF 11.0 128 -8 Vehicle Financers are projected to report ~26% YoY growth in AUM. Gold lenders
PNBHF 4.0 48 4 (including non-gold products) are expected to report a ~25% YoY growth. NBFC-
AAVAS 1.3 20 6 MFIs are forecasted to report a ~35% YoY growth, while diversified lenders are
HomeFirst 0.8 34 6 anticipated to deliver a ~24% YoY growth in AUM. For our coverage universe, we
CANF 2.0 31 26
estimate a loan growth of ~20% YoY/~5% QoQ in 3QFY24. Lenders acknowledged
REPCO 1.0 26 4
HFC - Total 20.0 75 -1 that they have started calibrating their growth in unsecured personal loans (PL;
VEF particularly those sourced through digital partnerships).
CIFC 8.5 24 12
 NIM trajectory remains an important monitorable: The extent of NIM recovery
MMFSL 5.3 -15 126
SFL 18.9 6 8
envisaged earlier in Vehicle Finance (VF) has not happened as yet because of the
VEF - Total 33 6 19 sustained rise in CoF, which might now peak by Mar/Jun’24. For Housing
GL Financiers, yields have maxed out (except for a change in product mix) and rising
MGFL 5.8 48 4 CoF would result in a sequential NIM compression.
Muthoot 10.2 13 3
GL - Total 16.0 23 3  Expect operating cost ratios to remain broadly stable: NBFCs/HFCs have been
MFI investing in either technology/analytics infrastructure or in branch expansions.
Credag 3.5 61 0 We expect operating cost ratios to remain sequentially stable with an
Fusion 1.4 33 9 improvement bias.
Spandana 1.3 86 6
MFI - Total 6.2 59 3  Asset quality exhibited minor improvement: We expect a minor improvement
Diversified in asset quality in Vehicle Finance as well as mortgages. MFI lenders could see
BAF 37.2 25 5 some slippages during the quarter, resulting in asset quality remaining more
Poonawalla 2.6 73 13 range-bound. We do not expect any higher delinquencies in affordable HFCs.
LTHF 6.2 23 5 Credit costs likely to remain benign, except for a) provisions for slippages from
MASFIN 0.6 26 6
restructured pool and b) write-offs in the PL portfolio.
Div - Total 46.7 27 5
Total (Universe) 121.6 27 7  Healthy profitability despite NIM moderation to result in ~27% YoY PAT
growth for the NBFC coverage universe: We estimate a ~22%/22%/27% YoY
growth in NII/PPoP/PAT in 3QFY24 for our coverage universe of NBFC – Lending
Financials. We remain constructive on Vehicle Finance and expect mortgages to
benefit from a recovery in both supply and demand. We continue to prefer: a)
franchises that can manage their liabilities better than others to mitigate the
impact on margins and b) companies with strong balance sheets and higher
visibility on earnings growth. Our top picks in the sector are SHTF, PNBHF, and
Fusion MFI.

Mortgages yet to fully recover; new housing scheme to aid demand

 Demand for mortgages in the affordable housing segment, with ticket sizes
below INR3m, has shown limited recovery and remains relatively weak.
However, there has been healthy demand observed for low-ticket mortgages
within the range of INR1.0-1.5m, particularly for self-construction purposes.
CANF (with an incremental ATS of ~INR2.2m in housing loans) could see muted
disbursements in the quarter because of a) a delay in demand recovery and b)
management bandwidth spent in process improvements.

Abhijit Tibrewal - Research Analyst (Abhijit.Tibrewal@MotilalOswal.com)

Research 2020 Nitin Aggarwal (Nitin.Aggarwal@MotilalOswal.com) | Gautam Rawtani (Gautam.Rawtani@Motilaloswal.com)
OctoberAnalyst: 127
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 We anticipate credit costs for LICHF at ~55bp (vs. ~60bp in 2QFY24) since we do
not estimate any further deterioration in asset quality. Margins could fall ~25bp
QoQ, led by moderation in yields and a rise in CoF.
 We expect both Aavas and HomeFirst to report a QoQ improvement in
disbursements, leading to healthy AUM growth. NIM would moderate for both
AHFCs because of a rise in CoB (despite benefits of NHB borrowings). Asset
quality is likely to remain stable with benign credit costs.
 We estimate that PNBHF was not adversely impacted as much by weak trends in
mortgages and expect it to report ~30% YoY growth in disbursements. We
estimate a ~5bp QoQ NIM expansion and improvement in GS3 for PNBHF.

Vehicle Finance – NIM recovery taking longer than earlier anticipated

 MMFS has reported disbursements of ~INR155b in 3QFY24 (up 7% YoY), but
growth in business assets was lower at ~3% QoQ because of conversion of pre-
festival trade advances into customer retail loans. We expect credit costs for
MMFS at ~1.3% in 3QFY24 (vs. 0.8% in 3QFY23). For CIFC/ SHTF, we estimate
disbursements to remain healthy, which should translate into ~39%/20% YoY
growth in AUM.
 We estimate NIM improvement of 5-10bp QoQ. Margin recovery is taking longer
than initially expected because of a sustained rise in the CoF.
 Expect minor improvement in vehicle finance (VF) asset quality for all the three
VFs in our coverage with a sequential moderation in credit costs.

Gold Finance – Loan growth recovery delayed because of festive period in 3Q

 Expect gold loan financiers to deliver a muted gold loan growth in 3QFY24. We
estimate tonnage growth to also remain modest because of high gold ornament
release requests from customers.
 We expect ~1-3% sequential growth in the gold loan portfolio of MUTH/MGFL.
NIM should exhibit QoQ compression because of the rise in CoF but stable yields.

Microfinance – Disbursement acceleration in 2H; NIM moderation likely

 Disbursements have remained healthy for NBFC-MFIs, leading to a healthy GLP
growth for all three NBFC-MFIs – CREDAG, Fusion, and Spandana – in our
coverage universe.
 While we estimate a ~10bp NIM compression for CREDAG (because of the rise in
CoF), we estimate a margin expansion of ~10bp for Fusion, driven by its lower
incremental cost of borrowings.
 While there were flows between asset quality buckets, we expect asset quality
to remain robust and credit costs to remain benign for NBFC-MFIs as well. We
expect higher write-offs for Fusion (leading to lower Stage 3) because of a
change in its write-off policy. For Fusion, we estimate 3QFY24 credit costs of
~3% (PQ: 3.4%).

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Diversified Financiers: Calibration in personal loans, but profitability robust

 Diversified lenders such as BAF, Poonawalla, LTFH, and non-vehicle segments of
SHFL are likely to exhibit calibration in growth within unsecured personal loans.
This has been more pronounced after the RBI increased the risk weights on
unsecured consumer credit to 125% (from 100% earlier).
 For LTFH, we expect strong growth in retail loans, but since the wholesale
segment (such as real estate and infrastructure) will continue to moderate, the
consolidated loan book could grow ~3% QoQ in 3QFY24. We estimate credit
costs to moderate for LTFH, leading to a sequential improvement in profitability.
 We expect BAF to report a ~34% YoY/7% QoQ growth in its AUM. We estimate a
~20bp contraction in NIM for BAF with credit costs increasing to ~1.7% (vs.
~1.5% in 2QFY24)
 We expect Poonawalla to deliver ~60% YoY growth in standalone AUM, driven
by ~10% QoQ growth in disbursements. We estimate this to translate into a
~13% QoQ growth in PAT for the company.

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Exhibit 1: Quarterly Performance

CMP NII (INR m) Operating profit (INR m) Net profit (INR m)
Variance Variance Variance Variance Variance Variance
Sector (INR) Rating Dec-23 Dec-23 Dec-23
YoY (%) QoQ (%) YoY (%) QoQ (%) YoY (%) QoQ (%)
AAVAS Financiers 1,559 Neutral 2,288 9.9 2.9 1,675 18.4 2.7 1,290 20.2 6.0
Bajaj Finance 7,298 Buy 76,471 29.1 6.3 61,812 27.4 5.9 37,238 25.3 4.9
Can Fin Homes 777 Neutral 3,274 30.1 3.4 2,767 30.0 2.4 1,985 31.1 25.6
Chola. Inv & Fin. 1,224 Buy 21,971 37.5 9.0 15,112 40.0 6.4 8,516 24.5 11.7
CreditAccess 1,594 Buy 7,869 45.6 3.1 5,634 48.8 0.1 3,480 61.2 0.3
Fusion Micro 586 Buy 3,224 27.8 5.4 2,503 36.2 3.5 1,367 33.4 8.7
Home First Fin. 932 Buy 1,379 24.7 4.4 1,084 32.9 3.8 786 34.1 5.8
L&T Fin. Holdings 164 Buy 18,910 3.8 2.6 12,981 4.0 0.1 6,248 23.0 5.1
LIC Housing Fin 562 Buy 19,657 22.4 -6.7 17,247 27.2 -9.2 10,973 128.5 -7.6
M & M Financial 275 Buy 16,887 8.8 6.4 10,233 2.5 8.5 5,321 -15.4 126.3
Manappuram Finance 171 Buy 14,060 28.8 3.8 8,897 50.3 2.7 5,808 47.6 3.6
MAS Financial 867 Buy 1,624 31.2 6.8 1,082 32.3 4.4 639 26.4 6.4
Muthoot Finance 1,468 Neutral 18,950 11.2 2.0 13,674 8.3 1.9 10,182 12.9 2.7
PNB Housing 785 Buy 6,640 -7.4 2.9 5,784 -14.2 4.8 3,995 48.4 4.3
Poonawalla Fincorp 438 Buy 5,224 73.5 10.1 3,677 136.0 9.6 2,602 73.0 13.1
Repco Home Fin 408 Neutral 1,746 25.9 3.0 1,389 26.2 3.8 1,016 25.8 3.5
Shriram Finance Ltd 2,048 Buy 48,382 15.4 5.3 37,015 12.1 6.3 18,869 6.2 7.8
Spandana Sphoorty 1,129 Buy 3,305 52.3 4.6 2,241 59.3 -13.0 1,331 86.4 6.3
NBFC 2,71,862 21.6 4.3 2,04,806 21.5 3.4 1,21,643 27.4 7.1

Exhibit 2: Relative Performance — three-months (%) Exhibit 3: Relative Performance — one-year (%)
Nifty Index MOFSL Financials Index Nifty Index MOFSL Financials Index
120 130

110 115

100 100

90 85
80
70
Oct-23
Sep-23

Dec-23
Nov-23

Mar-23

Jun-23
Dec-22

Sep-23

Dec-23
Source: Bloomberg, MOFSL Source: Bloomberg, MOFSL

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Exhibit 4: EPS estimate changes for FY24-26

Old Estimates New Estimates Change (%)
Company FY24 FY25 FY26 FY24 FY25 FY26 FY24 FY25 FY26
AAVAS 63.3 78.4 99.3 62.7 76.4 95.9 -1.0 -2.6 -3.4
BAF 240.1 309.8 393.5 238.0 306.3 389.4 -0.9 -1.1 -1.0
CANF 55.6 63.2 74.5 56.3 62.3 73.9 1.3 -1.4 -0.8
CIFC 42.0 57.0 70.6 41.5 55.4 68.8 -1.2 -2.7 -2.6
CREDAG 93.4 112.7 134.9 92.7 113.3 135.6 -0.8 0.5 0.5
FUSION 54.0 72.1 88.7 54.0 72.1 88.7 - - -
HomeFirst 34.4 41.9 54.1 34.3 41.6 53.5 -0.4 -0.8 -1.0
LTFH 9.6 11.7 15.5 9.7 11.7 15.5 1.4 - -
LICHF 82.2 84.1 92.2 82.2 84.1 92.2 - - -
MMFSL 15.3 22.5 28.2 14.6 22.2 27.8 -4.4 -1.4 -1.5
MGFL 26.4 30.1 35.9 26.5 30.1 35.9 0.4 0.1 0.1
MASFIN 45.6 58.2 71.3 45.6 58.2 71.3 - - -
Muthoot 101.0 115.0 130.9 101.0 115.0 130.9 - - -
PNBHF 58.2 69.4 83.8 58.8 70.7 86.5 1.1 1.9 3.3
PFL 12.9 18.8 26.2 12.9 18.8 26.2 - - -
REPCO 60.3 64.3 71.4 61.2 64.8 71.4 1.5 0.7 -0.0
SHFL 195.8 222.8 268.5 195.8 222.8 268.5 - - -
SPANDANA 71.1 92.7 113.0 73.5 92.6 110..9 3.4 -0.1 -1.9
Source: MOFSL, Company

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The tables below provide a snapshot of actual and estimated numbers for companies under the MOFSL coverage
universe. Highlighted columns indicate the quarter/financial year under review.

Aavas Financiers Neutral

CMP: INR1,559| TP: INR1,700 (9%) EPS CHANGE (%): FY24|25|26: -1.0|-2.6|-3.4
 AUM/disbursements likely to grow 23%/18% YoY  Opex is likely to remain elevated, owing to investments in
technology/distribution and branch additions
 We expect NIM to decline ~10bp QoQ. Upfront assignment  Commentaries on loan growth, margin trajectory, and
income estimated at ~INR470m. employee attrition are key monitorables.
Quarterly Performance (INR m)
Y/E March FY23 FY24E
FY23 FY24E
1QFY23 2QFY23 3QFY23 4QFY23 1QFY24 2QFY24 3QFY24 4QFY24
Interest Income 3,148 3,287 3,585 3,861 4,128 4,259 4,450 4,695 13,882 17,533
Interest Expenses 1,347 1,410 1,504 1,650 1,866 2,036 2,162 2,265 5,910 8,330
Net Income 1,802 1,877 2,082 2,211 2,262 2,223 2,288 2,430 7,971 9,203
YoY Growth (%) 20 15 32 23 26 18 10 10 22 15
Other income 380 664 534 641 540 716 745 742 2,220 2,743
Total Income 2,182 2,541 2,616 2,852 2,802 2,938 3,033 3,172 10,191 11,945
YoY Growth (%) 37 21 20 18 28 16 16 11 23 17
Operating Expenses 1,026 1,147 1,201 1,203 1,339 1,308 1,358 1,436 4,577 5,441
YoY Growth (%) 53 33 32 14 30 14 13 19 31 19
Operating Profits 1,156 1,394 1,415 1,649 1,464 1,631 1,675 1,735 5,614 6,504
YoY Growth (%) 26 13 12 22 27 17 18 5 17.6 15.9
Provisions 9 16 35 64 57 65 30 32 124 184
Profit before Tax 1,147 1,378 1,380 1,586 1,407 1,565 1,645 1,703 5,490 6,321
Tax Provisions 254 310 307 318 310 348 355 352 1,189 1,365
Profit after tax 892 1,068 1,073 1,268 1,097 1,217 1,290 1,351 4,301 4,955
YoY Growth (%) 49 16 20 10 23 14 20 7 20.5 15.2

Bajaj Finance Buy

CMP INR7,298| TP: INR8,900 (+22%) EPS CHANGE (%): FY24|25|26: -0.9|-1.1|-1.0
 BAF expected to report AUM growth of 34% YoY/ 7% QoQ  Opex is likely to remain stable with CIR at 34%
 Margins and spreads likely to decline ~25bp/15bp QoQ  Credit costs expected to rise ~10bp QoQ to ~1.7%
Quarterly Performance (INR b)
Y/E March FY23 FY24E
FY23 FY24E
1QFY23 2QFY23 3QFY23 4QFY23 1QFY24 2QFY24 3QFY24 4QFY24
Interest Income 79.2 85.1 92.7 98.5 108.2 117.3 125.8 133.3 355.5 484.6
Interest expenses 26.5 29.7 33.5 35.9 41.0 45.4 49.3 52.9 125.6 188.6
Net Interest Income 52.7 55.4 59.2 62.5 67.2 72.0 76.5 80.3 229.9 296.0
YoY Growth (%) 42.5 29.1 25.3 30.2 27.4 30.0 29.1 28.5 31.2 28.7
Other Operating Income 13.6 14.6 15.1 15.2 16.8 16.5 16.6 16.7 58.6 66.6
Net Income 66.4 70.0 74.3 77.7 84.0 88.4 93.1 97.1 288.5 362.6
YoY Growth (%) 47.8 31.2 23.9 28.1 33.3 26.3 25.2 24.9 31.8 25.7
Operating Expenses 23.8 25.1 25.8 26.5 28.5 30.1 31.2 32.2 101.3 122.1
Operating Profit 42.6 44.9 48.5 51.2 55.4 58.3 61.8 64.8 187.2 240.4
YoY Growth (%) 36.6 35.8 23.8 29.0 37.0 30.0 27.4 26.7 30.8 28.5
Provisions and Cont. 7.5 7.3 8.4 8.6 10.0 10.8 11.6 11.7 31.9 44.1
Profit before Tax 35.0 37.5 40.1 42.6 45.5 47.6 50.2 53.1 155.3 196.4
Tax Provisions 9.1 9.7 10.4 11.0 11.1 12.1 12.9 13.7 40.2 49.9
Net Profit 26.0 27.8 29.7 31.6 34.4 35.5 37.2 39.4 115.1 146.5
YoY Growth (%) 159.0 87.8 39.9 30.5 36.8 27.7 25.3 24.8 63.7 27.3

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Can Fin Homes Neutral

CMP INR777 | TP: INR840 (+8%) EPS CHANGE (%): FY24|25|26: 1.3|-1.4|-0.8
 Estimate loan book to grow ~13% YoY  Margins are expected to improve marginally to ~3.9%
 Commentaries on loan growth and expected timelines for
 Spreads expected to improve 10bp sequentially to ~3.3%
recovery in disbursements are key monitorables
Quarterly Performance (INR m)
Y/E March FY23 FY24E
FY23 FY24E
1QFY23 2QFY23 3QFY23 4QFY23 1QFY24 2QFY24 3QFY24 4QFY24
Interest Income 6,065 6,522 7,046 7,521 8,181 8,652 8,972 9,233 27,154 35,038
Interest Expenses 3,561 4,010 4,529 4,908 5,330 5,484 5,698 5,921 17,009 22,434
Net Interest Income 2,504 2,512 2,517 2,613 2,851 3,168 3,274 3,311 10,146 12,604
YoY Growth (%) 38.2 31.0 22.2 10.1 13.9 26.1 30.1 26.7 24.3 24.2
Other income 51 54 51 122 60 58 71 141 277 330
Total Income 2,555 2,566 2,568 2,735 2,911 3,226 3,345 3,453 10,423 12,934
YoY Growth (%) 39.8 30.2 20.9 12.7 13.9 25.7 30.3 26.2 24.8 24.1
Operating Expenses 405 405 438 517 435 524 577 608 1,765 2,144
YoY Growth (%) 33.8 18.3 8.7 7.3 7.4 29.5 31.7 17.6 15.3 21.5
Operating Profits 2,150 2,161 2,129 2,218 2,476 2,702 2,767 2,845 8,658 10,790
YoY Growth (%) 40.9 32.7 23.8 14.0 15.2 25.0 30.0 28.3 26.9 24.6
Provisions -37 132 84 238 137 722 155 100 418 1,114
Profit before Tax 2,187 2,028 2,045 1,980 2,339 1,980 2,612 2,745 8,240 9,676
Tax Provisions 565 611 530 322 504 399 627 647 2,028 2,177
Profit after tax 1,622 1,417 1,515 1,658 1,835 1,581 1,985 2,098 6,212 7,499
YoY Growth (%) 49.0 14.6 30.9 34.9 13.1 11.5 31.1 26.6 31.9 20.7

Cholamandalam Inv. & Fin. Buy

CMP INR1,224 | | TP: INR1,450 (+18%) EPS CHANGE (%): FY24|25|26: -1.2|-2.7|-2.6
 Estimate business AUM to grow ~39% YoY  Credit costs are projected to decline ~20bp QoQ to ~1.1%
 Guidance on margins, loan growth, and asset quality of new
 Margins are likely to expand ~10bp QoQ to 6.8%
businesses to be closely monitored
Quarterly Performance (INR m)
Y/E March FY23 FY24E
FY23 FY24E
1QFY23 2QFY23 3QFY23 4QFY23 1QFY24 2QFY24 3QFY24 4QFY24
Interest Income 26,123 28,293 31,416 34,991 38,492 42,205 45,919 49,614 1,20,822 1,76,230
Interest Expenses 11,309 13,404 15,433 17,342 20,071 22,052 23,948 25,647 57,488 91,718
Net Interest Income 14,814 14,888 15,983 17,649 18,421 20,153 21,971 23,967 63,334 84,512
YoY Growth (%) 16.9 17.3 17.2 29.0 24.3 35.4 37.5 35.8 20.2 33.4
Other Income 1,587 2,085 2,334 2,952 2,845 3,514 3,077 3,006 8,958 12,442
Total Income 16,401 16,974 18,317 20,601 21,265 23,667 25,048 26,973 72,292 96,953
YoY Growth (%) 20.3 21.9 23.4 32.0 29.7 39.4 36.7 30.9 23.8 34.1
Operating Expenses 5,797 6,611 7,520 7,870 7,867 9,461 9,936 10,199 27,799 37,463
Operating Profit 10,604 10,363 10,797 12,731 13,399 14,206 15,112 16,774 44,494 59,490
YoY Growth (%) 6.8 18.4 13.4 39.6 26.4 37.1 40.0 31.8 18.0 33.7
Provisions & Loan Losses 2,986 2,782 1,589 1,140 3,723 3,998 3,650 1,157 8,497 12,529
Profit before Tax 7,617 7,581 9,208 11,591 9,675 10,208 11,462 15,617 35,997 46,962
Tax Provisions 1,961 1,947 2,365 3,063 2,415 2,583 2,946 4,220 9,335 12,163
Net Profit 5,657 5,634 6,843 8,528 7,260 7,625 8,516 11,397 26,662 34,798
YoY Growth (%) 73.1 -7.1 30.6 23.7 28.3 35.3 24.5 33.6 24.2 30.5

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CreditAccess Grameen Ltd. Buy

CMP INR1,594 | | TP: INR1,845 (+16%) EPS CHANGE (%): FY24|25|26: -0.8|0.5|0.5
 Estimate GLP growth of ~33% YoY  Credit costs are projected to be stable QoQ at ~1.7%
 Guidance on NIM and cost-income ratio to be closely
 Margins are likely to decline ~10bp on a sequential basis
monitored
Quarterly Performance (INR m)
Y/E March FY23 FY24
FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q
Interest Income 7,363 7,713 8,548 9,648 11,052 11,874 12,510 13,379 33,271 48,815
Interest Expenses 2,798 2,732 3,142 3,456 3,849 4,239 4,641 5,098 12,129 17,827
Net Interest Income 4,565 4,981 5,406 6,192 7,203 7,635 7,869 8,281 21,143 30,988
YoY Growth (%) 35.1 35.1 31.2 34.2 57.8 53.3 45.6 33.8 33.5 46.6
Other Income 233 434 540 1,015 656 602 499 1,340 2,237 3,096
Total Income 4,798 5,415 5,946 7,206 7,858 8,237 8,368 9,621 23,379 34,084
YoY Growth (%) 30.4 38.9 32.0 29.3 63.8 52.1 40.7 33.5 32.4 45.8
Operating Expenses 1,909 2,067 2,160 2,177 2,420 2,611 2,733 2,882 8,315 10,646
Operating Profit 2,889 3,348 3,785 5,029 5,438 5,626 5,634 6,739 15,064 23,437
YoY Growth (%) 33.5 53.2 38.4 36.4 88.3 68.1 48.8 34.0 39.8 55.6
Provisions & Loan Losses 1,009 1,054 894 1,053 764 959 963 986 4,010 3,671
Profit before Tax 1,880 2,294 2,891 3,976 4,674 4,668 4,671 5,754 11,054 19,766
Tax Provisions 493 529 733 1,010 1,189 1,197 1,191 1,463 2,794 5,040
Net Profit 1,387 1,766 2,158 2,966 3,485 3,470 3,480 4,291 8,261 14,726
YoY Growth (%) 583.6 196.5 84.5 85.3 151.3 96.6 61.2 44.7 131.5 78.3

Fusion Microfinance Buy

CMP INR586 | | TP: INR720 (+23%) EPS CHANGE (%): FY24|25|26: 0.0|0.0|0.0
 Estimate AUM to grow ~23% YoY  Annualized credit costs are projected at ~3% in 3QFY24
 Guidance on credit costs, margins, and disbursement
 Margins are likely to expand ~10bp on sequential basis
trajectory to be closely monitored
Quarterly Performance (INR m)
Y/E March FY23 FY24 FY24E
FY23
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q
Interest Income 3,294 3,998 4,202 4,507 4,790 4,968 5,206 5,589 16,001 20,553
Interest Expenses 1,432 1,573 1,680 1,742 1,835 1,910 1,983 2,121 6,428 7,849
Net Interest Income 1,862 2,424 2,522 2,765 2,955 3,058 3,224 3,468 9,573 12,705
YoY Growth (%) 47.1 115.4 59.0 62.0 58.7 26.1 27.8 25.4 68.4 32.7
Other Income 311 526 463 700 738 745 720 653 1,999 2,855
Total Income 2,173 2,950 2,985 3,465 3,693 3,803 3,943 4,120 11,572 15,559
YoY Growth (%) 53.5 97.4 67.3 46.8 70.0 28.9 32.1 18.9 64.1 34.5
Operating Expenses 971 1,077 1,147 1,253 1,339 1,385 1,440 1,504 4,448 5,668
Operating Profit 1,202 1,873 1,838 2,211 2,354 2,418 2,503 2,616 7,124 9,891
YoY Growth (%) 61.1 156.3 91.8 47.8 95.8 29.1 36.2 18.3 81.2 38.9
Provisions & Loan Losses 201 612 499 692 759 762 693 495 2,004 2,709
Profit before Tax 1,001 1,261 1,339 1,519 1,595 1,656 1,810 2,121 5,120 7,182
Tax Provisions 249 310 314 374 390 399 443 527 1,248 1,760
Net Profit 752 951 1,025 1,145 1,205 1,257 1,367 1,594 3,871 5,422
YoY Growth (%) 1,605 2,860 10,835 768 60 32 33 39 1,680 40

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Home First Finance Company Buy

CMP INR932| TP: INR1100 (+18%) EPS CHANGE (%): FY24|25|26: -0.4|-0.8|-1.0
 Estimate robust AUM growth of ~34% YoY/8% QoQ  Cost ratios are expected to remain stable at ~35%
 Margins are projected to decline ~20bp in 3QFY24  Outlook on loan growth, margins, and delinquencies are key
monitorables
Quarterly Performance (INR m)
Y/E March FY23 FY24E
FY23 FY24E
1QFY23 2QFY23 3QFY23 4QFY23 1QFY24 2QFY24 3QFY24 4QFY24
Interest Income 1,547 1,727 1,902 2,047 2,313 2,491 2,641 2,778 7,222 10,222
Interest expenses 607 712 796 929 1,068 1,170 1,261 1,347 3,043 4,846
Net Interest Income 940 1,016 1,106 1,118 1,246 1,321 1,379 1,430 4,179 5,376
YoY Growth (%) 50.8 58.2 54.2 31.4 32.6 30.1 24.7 28.0 41.2 28.6
Other Income 147 167 152 266 285 289 292 345 734 1,210
Net Income 1,086 1,182 1,258 1,384 1,530 1,610 1,671 1,776 4,913 6,586
YoY Growth (%) 22.3 31.8 30.5 35.4 40.9 36.1 32.8 28.3 29.3 34.1
Operating Expenses 387 441 443 475 553 565 587 628 1,746 2,334
Operating Profit 699 741 816 910 977 1,044 1,084 1,147 3,167 4,253
YoY Growth (%) 15.3 24.3 25.3 38.1 39.8 40.9 32.9 26.1 24.8 34.3
Provisions and Cont. 36 50 60 70 77 80 70 100 215 326
Profit before Tax 663 692 756 840 900 964 1,014 1,047 2,952 3,926
Tax Provisions 151 149 170 200 209 221 228 233 669 891
Net Profit 512 543 586 640 691 743 786 815 2,283 3,035
YoY Growth (%) 46.0 20.9 27.6 6.4 34.9 36.9 34.1 27.3 21.1 32.9

L&T Finance Holdings Buy

CMP INR164 | TP: INR195 (+19%) EPS CHANGE (%): FY24|25|26: 1.4|0.0|0.0
 Expect the loan book to grow ~3% QoQ with strong retail
 NIMs are expected to improve ~10bp on a sequential basis
growth, but moderation in wholesale segments
 Anticipate credit costs to decline to ~2.3% (annualized) in
3QFY24 (vs. 2.5% in 2QFY24)  Opex will remain elevated with cost-to-income ratio at ~41%

Quarterly Performance (INR m)

Y/E March FY23 FY24E
FY23 FY24E
1QFY23 2QFY23 3QFY23 4QFY23 1QFY24 2QFY24 3QFY24 4QFY24
Interest Income 29,466 30,862 33,216 32,107 31,165 31,685 32,478 33,414 1,25,651 1,28,742
Interest Expenses 14,132 14,385 15,007 14,449 13,638 13,249 13,567 13,758 57,972 54,212
Net Interest Income 15,334 16,477 18,209 17,658 17,527 18,436 18,910 19,656 67,679 74,530
Change YoY (%) 2.3 12.8 24.1 15.7 14.3 11.9 3.8 11.3 13.7 10.1
Other Operating Income 1,318 1,090 1,109 53 1,068 453 450 811 3,569 2,782
Net Operating Income 16,652 17,567 19,318 17,711 18,596 18,889 19,360 20,468 71,248 77,312
Change YoY (%) 2.1 9.1 16.1 7.0 11.7 7.5 0.2 15.6 8.6 8.5
Other income 1,474 1,193 585 2,016 1,535 2,682 2,521 2,216 5,268 8,955
Total Income 18,126 18,760 19,903 19,726 20,130 21,572 21,882 22,684 76,515 86,267
Change YoY (%) 7.1 10.8 11.0 11.1 11.1 15.0 9.9 15.0 10.0 12.7
Operating Expenses 6,577 6,868 7,417 7,870 7,782 8,598 8,901 9,359 28,732 34,639
Change YoY (%) 19.9 16.3 20.3 23.2 18.3 25.2 20.0 18.9 20.0 20.6
Operating Profits 11,549 11,891 12,486 12,698 12,348 12,974 12,981 13,325 48,624 51,628
Change YoY (%) 0.9 7.9 6.2 11.8 6.9 9.1 4.0 4.9 6.7 6.2
Provisions 7,989 5,765 6,417 5,232 5,212 5,000 4,595 4,504 25,404 19,311
Profit before Tax 3,560 6,126 6,069 7,466 7,136 7,974 8,387 8,821 23,220 32,317
Tax Provisions 948 2,070 990 2,455 1,831 2,032 2,139 2,240 6,464 8,241
Profit after tax 2,612 4,056 4,538 5,011 5,305 5,942 6,248 6,581 16,216 24,076
Change YoY (%) 46.8 81.0 39.2 46.4 103.1 46.5 37.7 31.3 51.5 48.5

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LIC Housing Finance Buy

CMP INR562 | TP: INR660 (+17%) EPS CHANGE (%): FY24|25|26: 0.0|0.0|0.0
 Expect loan growth of ~6% YoY with a largely stable mix  Yields are expected to decline on a sequential basis, leading
to ~25bp compression in NIM
 Estimate annualized credit costs of ~55bp in 3QFY24 vs.  Commentaries on slippages from restructured pool,
~60bp in 2QFY24 mortgage demand, and guidance on margins are key
monitorables
Quarterly Performance (INR m)
Y/E March FY23 FY24E
FY23 FY24E
1QFY23 2QFY23 3QFY23 4QFY23 1QFY24 2QFY24 3QFY24 4QFY24
Interest Income 52,502 50,493 58,387 63,780 67,037 67,066 67,268 68,187 2,25,162 2,69,558
Interest Expenses 36,400 38,864 42,328 43,877 44,942 46,000 47,610 50,223 1,61,860 1,88,775
Net Interest Income 16,102 11,629 16,059 19,903 22,094 21,066 19,657 17,965 63,303 80,783
YoY Growth (%) 26.3 -0.4 10.4 21.5 37.2 81.2 22.4 -9.7 14.4 27.6
Fees and other income 407 427 374 371 429 521 522 490 1,580 1,962
Net Income 16,509 12,056 16,432 20,274 22,523 21,587 20,180 18,455 64,882 82,745
YoY Growth (%) 26.1 -0.3 7.8 15.4 36.4 79.1 22.8 -9.0 11.9 27.5
Operating Expenses 2,029 2,610 2,876 2,759 2,425 2,595 2,933 4,120 9,883 12,073
Operating Profit 14,481 9,447 13,557 17,515 20,098 18,993 17,247 14,335 55,000 70,672
YoY Growth (%) 40.9 -0.4 2.9 16.2 38.8 101.1 27.2 -18.2 14.6 28.5
Provisions and Cont. 3,077 5,658 7,627 3,068 3,608 4,192 3,750 3,293 19,430 14,843
Profit before Tax 11,404 3,789 5,930 14,448 16,490 14,801 13,497 11,042 35,570 55,829
Tax Provisions 2,149 739 1,127 2,645 3,253 2,920 2,524 1,910 6,660 10,608
Net Profit 9,255 3,050 4,803 11,803 13,237 11,881 10,973 9,131 28,910 45,222
YoY Growth (%) 503.2 23.0 -37.4 5.5 43.0 289.6 128.5 -22.6 26.4 56.4

Mahindra Financial Services Buy

CMP INR275| TP: INR330 (+20%) EPS CHANGE (%): FY24|25|26: -4.4|-1.4|-1.5
 MMFS reported 3QFY24 disbursement growth of ~7%  Estimate credit costs at ~1.3% in 3QFY24 (vs. ~2.8% QoQ)
YoY/16% QoQ  Commentaries on margins, credit costs, and loan growth are
 We expect ~5bp QoQ expansion in margins key monitorables
Quarterly Performance (INR m)
Y/E March FY23 FY24E
FY23 FY24E
1QFY23 2QFY23 3QFY23 4QFY23 1QFY24 2QFY24 3QFY24 4QFY24
Interest income 24,372 25,163 27,947 29,344 30,349 31,535 33,648 35,836 1,06,826 1,31,367
Interest Expenses 9,320 10,688 12,419 13,340 14,505 15,665 16,761 17,747 45,767 64,677
NII 15,052 14,475 15,528 16,004 15,844 15,870 16,887 18,089 61,059 66,690
YoY Growth (%) 34.2 0.3 1.1 11.1 5.3 9.6 8.8 13.0 9.9 9.2
Other income 614 930 969 1,223 905 870 1,073 1,720 3,735 4,569
Net Total Income 15,666 15,405 16,496 17,227 16,750 16,740 17,960 19,809 64,794 71,259
YoY Growth (%) 34.0 2.2 3.6 13.7 6.9 8.7 8.9 15.0 11.7 10.0
Operating Expenses 6,208 6,768 6,513 7,786 6,750 7,312 7,727 8,795 27,276 30,584
Operating Profit 9,458 8,637 9,983 9,441 10,000 9,428 10,233 11,014 37,518 40,674
YoY Growth (%) 26.3 -15.0 -6.0 5.1 5.7 9.2 2.5 16.7 0.7 8.4
Provisions 6,453 1,985 1,551 4 5,264 6,266 3,091 1,881 9,992 16,501
Profit before Tax 3,005 6,652 8,431 9,437 4,735 3,163 7,142 9,133 27,526 24,173
Tax Provisions 776 1,624 2,142 2,596 1,209 811 1,821 2,323 7,138 6,164
Net Profit 2,229 4,483 6,290 6,841 3,527 2,352 5,321 6,810 19,843 18,009
YoY Growth (%) -114.6 -56.2 -29.6 13.9 58.2 -47.5 -15.4 -0.5 100.7 -9.2

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Manappuram Finance Buy

CMP INR171 | TP: INR205 (+20%) EPS CHANGE (%): FY24|25|26: 0.4|0.1|0.1
 Expect gold AUM/consolidated AUM to grow ~1.0%/5% on  Expect credit costs to decline ~20bp QoQ to ~1.1%
sequential basis
 Factored in a margin decline of ~20bp QoQ and a spread  Commentaries on gold loan growth and asset quality in the
decline of ~5bp in the consolidated loan book MFI and Vehicle segments are key monitorables
Quarterly Performance (Consolidated) (INR m))
Y/E March FY23 FY24E
FY23 FY24E
1QFY23 2QFY23 3QFY23 4QFY23 1QFY24 2QFY24 3QFY24 4QFY24
Interest Income 14,612 16,078 16,574 17,141 19,363 20,438 21,644 23,075 64,404 84,519
Interest Expenses 5,046 5,284 5,657 5,891 6,484 6,894 7,584 8,155 21,878 29,117
Net Interest Income 9,566 10,795 10,917 11,250 12,879 13,543 14,060 14,920 42,526 55,402
YoY Growth (%) -7.0 9.4 19.3 25.2 34.6 25.5 28.8 32.6 11.1 30.3
Other income 416 1,063 772 845 1,209 1,303 1,183 948 3,095 4,643
Net Income 9,981 11,858 11,688 12,095 14,088 14,846 15,243 15,869 45,622 60,045
Operating Expenses 4,890 5,525 5,769 5,955 6,068 6,182 6,346 6,903 22,140 25,498
Operating Profits 5,091 6,333 5,919 6,139 8,020 8,664 8,897 8,965 23,482 34,547
YoY Growth (%) -28.2 5.1 30.7 21.5 57.5 36.8 50.3 46.0 3.5 47.1
Provisions 1,283 805 509 474 1,212 1,197 1,048 721 3,071 4,178
PBT 3,808 5,527 5,410 5,666 6,808 7,467 7,849 8,244 20,410 30,368
Tax Provisions 989 1,433 1,475 1,513 1,828 1,861 2,041 2,227 5,409 7,956
PAT 2,819 4,095 3,935 4,153 4,980 5,607 5,808 6,017 15,002 22,412
YoY Growth (%) -35.5 10.7 50.8 59.1 76.7 36.9 47.6 44.9 12.9 49.4

MAS Financial Buy

CMP INR867 | TP: INR1,100 (+27%) EPS CHANGE (%): FY24|25|26: 0.0|0.0|0.0
 Standalone AUM is expected to grow ~6% QoQ/~26%
 Margins are likely to remain stable at ~7%
YoY
 We expect credit costs to improve ~10bp QoQ to ~1% in Commentary on branch expansions and increase in the direct
3QFY24 business are key monitorables
Quarterly Performance (INR m)
Y/E March FY23 FY24E
FY23 FY24E
1QFY23 2QFY23 3QFY23 4QFY23 1QFY24 2QFY24 3QFY24 4QFY24
Revenue from Operations 1,983 2,300 2,515 2,703 2,801 2,982 3,231 3,479 9,491 12,493
Interest Income 1,677 1,941 2,183 2,325 2,362 2,490 2,715 2,956 8,066 10,523
Gain on assignments 157 178 158 198 242 272 280 281 680 1,075
Other operating Income 150 182 173 180 196 219 237 242 745 895
Interest expenses 928 1,108 1,276 1,435 1,428 1,461 1,607 1,780 4,748 6,277
Total income 1,055 1,192 1,238 1,268 1,373 1,520 1,624 1,698 4,743 6,216
Growth Y-o-Y (%) 34.3 47.5 39.7 36.1 30.2 27.6 31.2 34.0 40.5 31.1
Operating Expenses 348 416 421 381 427 484 542 606 1,566 2,060
Operating Profits 707 775 818 887 946 1,036 1,082 1,092 3,177 4,156
Growth Y-o-Y (%) 11.1 28.2 34.8 39.0 33.8 33.6 32.3 23.2 29.5 30.8
Provisions 85 121 142 182 188 236 230 168 530 822
Profit before tax 623 654 676 704 758 800 852 924 2,647 3,334
Growth Y-o-Y (%) 25.7 27.0 25.4 17.4 21.8 22.3 26.0 31.3 25.3 26.0
Tax Provisions 157 164 170 149 186 200 213 242 637 840
Net Profit 465 491 506 556 573 600 639 683 2,010 2,494
Growth Y-o-Y (%) 26.3 28.0 26.0 23.4 23.1 22.3 26.4 22.9 27.6 24.1

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Muthoot Finance Neutral

CMP INR 1,468| TP: INR1,350 (-8%) EPS CHANGE (%): FY24|25|26: 0.0|0.0|0.0
 Estimate gold AUM growth of ~3% QoQ in a seasonally weak  CIR to remain stable at ~30% QoQ
quarter
 We estimate ~5bp sequential contraction in margins  Commentaries on gold loan growth and margin guidance are
key monitorables
Quarterly Performance (INR m)
Y/E March FY23 FY24E
FY23 FY24E
1QFY23 2QFY23 3QFY23 4QFY23 1QFY24 2QFY24 3QFY24 4QFY24
Interest Income 24,816 24,746 26,184 27,940 29,577 30,147 31,323 33,043 1,03,686 1,24,090
Other operating income 223 231 414 594 410 450 472 496 1,462 1,828
Total Operating income 25,039 24,977 26,598 28,534 29,987 30,597 31,795 33,539 1,05,148 1,25,918
YoY Growth (%) -7.7 -11.8 -7.3 6.9 19.8 22.5 19.5 17.5 -5.1 19.8
Other income 54 58 73 104 276 139 174 210 289 800
Total Income 25,093 25,036 26,671 28,638 30,263 30,736 31,969 33,749 1,05,437 1,26,718
YoY Growth (%) -7.6 -11.6 -7.1 6.9 20.6 22.8 19.9 17.8 -5.0 20.2
Interest Expenses 9,416 9,027 9,141 9,407 10,638 11,563 12,372 12,969 36,991 47,542
Net Income 15,677 16,009 17,530 19,231 19,625 19,173 19,597 20,781 68,446 79,176
Operating Expenses 5,435 4,522 4,905 6,314 5,620 5,751 5,923 6,629 21,177 23,923
Operating Profit 10,241 11,487 12,624 12,917 14,006 13,422 13,674 14,152 47,270 55,253
YoY Growth (%) -23.2 -18.8 -13.9 5.7 36.8 16.9 8.3 9.6 -13.0 16.9
Provisions -577 -127 557 753 860 120 -30 -159 605 791
Profit before Tax 10,818 11,614 12,068 12,164 13,145 13,302 13,704 14,311 46,664 54,462
Tax Provisions 2,798 2,942 3,051 3,138 3,394 3,392 3,522 3,614 11,929 13,922
Net Profit 8,020 8,672 9,017 9,027 9,751 9,910 10,182 10,697 34,735 40,540
YoY Growth (%) -17.4 -12.8 -12.4 -6.0 21.6 14.3 12.9 18.5 -12.2 16.7

PNB Housing Finance BUY

CMP INR785 | TP: INR960 (22%) EPS CHANGE (%): FY24|25|: 1.1|1.9|3.3
 Total AUM growth is expected to be ~5% YoY  Cost ratios are expected to moderate despite investments in
distribution capabilities
 Expect credit costs to increase ~10bp QoQ to ~40bp in  Commentaries on the asset quality of the retail loan book,
3QFY24 NIM, and disbursement trajectory are key monitorables
Quarterly Performance (INR m)
FY23 FY24E
FY23 FY24E
1QFY23 2QFY23 3QFY23 4QFY23 1QFY24 2QFY24 3QFY24 4QFY24
Interest Income 12,987 15,975 17,136 15,892 16,669 17,029 17,488 18,396 61,991 69,582
Interest Expenses 9,303 9,639 9,963 10,081 10,475 10,573 10,848 11,441 38,985 43,337
Net Interest Income 3,684 6,337 7,173 5,812 6,194 6,456 6,640 6,955 23,006 26,245
YoY Growth (%) -27.6 36.2 72.8 57.6 68.1 1.9 -7.4 19.7 30.9 14.1
Other income 1,124 868 829 485 408 765 794 933 3,306 2,900
Total Income 4,808 7,205 8,002 6,297 6,602 7,221 7,435 7,887 26,311 29,145
YoY Growth (%) -18.5 30.6 60.2 27.2 37.3 0.2 -7.1 25.3 23.2 10.8
Operating Expenses 1,214 1,368 1,262 1,468 1,530 1,702 1,651 1,725 5,313 6,607
YoY Growth (%) 5.4 15.4 8.5 16.7 26.0 24.4 30.8 17.5 11.6 24.4
Operating Profits 3,594 5,837 6,740 4,828 5,072 5,519 5,784 6,162 20,998 22,538
YoY Growth (%) -24.3 34.8 75.9 30.7 41.1 -5.4 -14.2 27.6 26.5 7.3
Provisions 483 2,432 3,071 1,403 606 448 630 1,276 7,389 2,960
Profit before Tax 3,111 3,404 3,669 3,425 4,467 5,071 5,154 4,886 13,609 19,578
Tax Provisions 761 778 978 632 994 1,241 1,160 913 3,149 4,307
Profit after tax 2,350 2,626 2,691 2,793 3,473 3,830 3,995 3,973 10,460 15,271
YoY Growth (%) -3.4 11.7 42.8 64.7 47.8 45.8 48.4 42.3 25.0 46.0

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Poonawalla Fincorp Buy

CMP INR438 | TP: INR510 (+17%) EPS CHANGE (%): FY24|25|26: 0.0|0.0|0.0
 Standalone AUM expected to grow ~60% YoY  Expect margins to decline~35bp QoQ
 Expect cost ratios and credit cost to remain stable on a  Commentaries on growth in personal loans, margins, and
sequential basis asset quality/credit costs are key monitorables
Quarterly Performance (Standalone) (INR m)
Y/E March FY23 FY24E
FY23 FY24E
1QFY23 2QFY23 3QFY23 4QFY23 1QFY24 2QFY24 3QFY24 4QFY24
Interest Income 3,857 4,179 4,605 5,529 6,560 6,901 7,487 8,413 18,265 29,361
Interest Expenses 1,187 1,441 1,593 1,732 2,348 2,155 2,263 2,637 5,953 9,403
Net Interest Income 2,670 2,738 3,012 3,798 4,212 4,746 5,224 5,776 12,312 19,958
YoY Growth (%) 26.3 12.0 23.6 52.0 77.8 73.3 73.5 52.1 29.7 62.1
Other Income 434 627 588 282 563 539 574 733 1,931 2,410
Total Income 3,103 3,365 3,600 4,080 4,775 5,285 5,799 6,509 14,243 22,368
YoY Growth (%) 34.6 25.1 33.2 41.7 70.3 57.1 61.1 59.5 34.6 57.0
Operating Expenses 1,926 2,107 2,043 2,064 1,834 1,929 2,122 2,317 8,139 8,202
Operating Profit 1,178 1,257 1,558 2,016 2,941 3,356 3,677 4,192 6,104 14,166
YoY Growth (%) 16.8 2.8 35.6 75.0 185.0 167.0 136.0 107.9 34.7 132.1
Provisions & Loan Losses -164 -482 -452 -347 266 281 298 333 -1,445 1,177
Profit before Tax 1,550 1,740 2,010 2,367 2,676 3,075 3,379 3,859 7,761 12,989
Exceptional items 12,212 12,212
Tax Provisions 313 438 506 560 674 2,698 777 853 1,816 3,078
PAT (excl. exceptional) 1,237 1,302 1,504 1,807 2,002 2,300 2,602 3,006 5,945 9,911
PAT (incl. exceptional) 1,237 1,302 1,504 1,807 2,002 12,589 2,602 3,006 5,945 20,200
YoY Growth (%) 148.2 75.8 87.5 102.7 86.0 76.7 73.0 66.4 102.8 66.7

Repco Home Finance Neutral

CMP INR408 | TP: INR460 (13%) EPS CHANGE (%): FY24|25|26: 1.5|0.7|0.0
 Disbursements/AUM expected to grow ~10%/8% YoY  Spreads and margins are likely to expand ~5bp/10bp QoQ
 Estimate credit costs to remain benign at 0.1% (stable QoQ)  Commentaries around asset quality and guidance on
disbursements/AUM growth are key monitorables
Quarterly Performance (INR m)
Y/E March FY23 FY24E
FY23 FY24E
1QFY23 2QFY23 3QFY23 4QFY23 1QFY24 2QFY24 3QFY24 4QFY24
Interest Income 2,980 3,064 3,197 3,330 3,572 3,770 3,887 3,837 12,570 15,066
Interest Expenses 1,653 1,692 1,810 1,856 2,026 2,075 2,141 2,195 7,011 8,437
Net Income 1,327 1,372 1,387 1,474 1,546 1,695 1,746 1,642 5,560 6,629
YoY Growth (%) -8.4 -12.1 -7.0 4.9 16.5 23.6 25.9 11.4 -5.8 19.2
Other income 90 112 111 108 93 69 90 232 421 484
Total Income 1,417 1,484 1,499 1,581 1,639 1,765 1,836 1,874 5,981 7,114
YoY Growth (%) -3.4 -7.3 -2.4 1.2 15.7 18.9 22.5 18.5 -3.0 18.9
Operating Expenses 339 343 398 378 392 426 448 422 1,458 1,687
YoY Growth (%) 37.8 21.1 15.8 2.8 15.7 24.4 12.5 11.5 17.5 15.8
Operating Profits 1,078 1,141 1,101 1,203 1,247 1,338 1,389 1,453 4,523 5,426
YoY Growth (%) -11.7 -13.4 -7.7 0.7 15.7 17.3 26.2 20.7 -8.2 20.0
Provisions 237 188 12 79 50 16 20 157 516 242
Profit before Tax 841 954 1,089 1,124 1,198 1,322 1,369 1,296 4,008 5,184
Tax Provisions 220 242 282 303 307 341 353 353 1,047 1,354
Profit after tax 621 712 808 821 891 981 1,016 942 2,961 3,830
YoY Growth (%) 93.2 -17.2 156.6 95.3 43.5 37.9 25.8 14.8 54.6 29.4

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Shriram Finance Ltd Buy

CMP INR2,048 | TP: INR2,400 (+17%) EPS CHANGE (%): FY24|25|26: 0.0|0.0|0.0
 Estimate disbursements of ~INR370b, leading to an AUM of  Credit costs are likely to be stable around 2.3% in 3QFY24
~INR2.1t (up 20% YoY/ ~5% QoQ)
 Margins expected to remain stable on a sequential basis  Commentaries on loan growth in CV and on asset quality in
2W and PL segments are key monitorables
Quarterly Performance (INR m)
Y/E March FY23 FY24E
FY23 FY24E
1QFY23 2QFY23 3QFY23 4QFY23 1QFY24 2QFY24 3QFY24 4QFY24
Interest Income 67,796 70,024 73,099 74,232 76,880 82,166 86,520 90,645 2,86,074 3,36,211
Interest Expenses 29,516 32,249 31,178 32,422 34,875 36,219 38,138 40,625 1,25,458 1,49,857
Net Interest Income 38,280 37,775 41,921 41,810 42,004 45,947 48,382 50,020 1,60,616 1,86,354
YoY Growth (%) 33.8 24.2 30.8 19.9 20.0 21.6 15.4 19.6 27.5 16.0
Other Income 2,237 4,162 3,022 3,460 3,167 3,479 3,550 3,869 11,955 14,064
Total Income 40,517 41,937 44,944 45,270 45,171 49,426 51,932 53,889 1,72,571 2,00,418
YoY Growth (%) 31.8 29.6 28.9 21.1 22.0 17.9 15.5 19.0 27.5 16.1
Operating Expenses 10,841 11,999 11,928 14,459 13,908 14,618 14,917 15,838 49,131 59,280
Operating Profit 29,676 29,938 33,016 30,810 31,262 34,808 37,015 38,052 1,23,441 1,41,137
YoY Growth (%) 32.3 30.4 31.4 13.9 17.3 16.3 12.1 23.5 26.5 14.3
Provisions & Loan Losses 11,597 8,976 9,173 11,846 8,786 11,286 11,688 10,979 41,592 42,739
Profit before Tax 18,079 20,962 23,844 18,964 22,476 23,523 25,327 27,072 81,849 98,399
Tax Provisions 4,690 5,411 6,074 5,881 5,722 6,014 6,458 6,897 22,056 25,092
Net Profit 13,390 15,551 17,770 13,083 16,754 17,508 18,869 20,175 59,793 73,307
YoY Growth (%) 254.3 47.6 82.6 -5.8 30.8 12.6 6.2 54.2 57.7 22.6

Spandana Spoorthy Buy

CMP INR1,129 | TP: INR1,320 (+17%) EPS CHANGE (%): FY24|25|26: 3.4|-0.1|-1.9
 Estimate disbursements of ~INR29.9b, leading to AUM of  Annualized credit costs are likely to be around ~1.9% in
~INR108b (~AUM growth of 57% YoY/ ~10% QoQ) 3QFY24 (vs. 4.2% in 2QFY24)
 Margins expected to decline ~60bp QoQ to ~14.2% because  Guidance on credit costs, margins, and AUM growth to be
of higher leverage closely monitored
Quarterly Performance (INR m)
Y/E March FY23 FY24
FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q
Interest Income 2,440 2,765 3,377 4,193 4,929 5,436 5,969 6,583 12,775 22,917
Interest Expenses 968 914 1,207 1,490 1,995 2,277 2,665 3,062 4,579 10,000
Net Interest Income 1,472 1,851 2,170 2,703 2,934 3,159 3,305 3,520 8,196 12,917
YoY Growth (%) -41.9 -7.7 14.5 76.8 99.3 70.6 52.3 30.2 2.9 57.6
Other Income 149 337 373 1,137 344 966 626 704 1,995 2,639
Total Income 1,621 2,188 2,543 3,840 3,277 4,125 3,931 4,224 10,192 15,557
YoY Growth (%) -44.4 -11.2 20.6 100.9 102.2 88.5 54.6 10.0 8.4 52.6
Operating Expenses 1,114 1,088 1,136 1,232 1,386 1,549 1,690 1,839 4,570 6,464
Operating Profit 506 1,100 1,406 2,608 1,891 2,576 2,241 2,385 5,621 9,093
YoY Growth (%) -77.6 -35.2 13.6 351.3 273.5 134.1 59.3 -8.6 -2.6 61.8
Provisions & Loan Losses 3,517 258 446 1,222 286 901 450 430 5,443 2,067
Profit before Tax -3,011 843 960 1,386 1,605 1,675 1,791 1,955 178 7,026
Tax Provisions -814 291 247 330 411 423 460 512 54 1,806
Net Profit -2,197 552 714 1,055 1,195 1,252 1,331 1,443 124 5,221
YoY Growth (%) -501.0 -194.1 58.3 269.0 -154.4 126.9 86.4 36.8 -82.3 4,112.1

January 2024 140

 December 2023 Results Preview | Sector: Financials – Non lending

Financials – Non Lending

Capital markets-linked companies to deliver strong performance
Price hike set to improve health segment loss ratios; VNB margins to improve QoQ
 In 3QFY24, Nifty surpassed 21,750, translating into healthy trends in key parameters
(volumes, orders, client additions, etc.) for capital markets-related companies. Both
equity and commodity segments continued to witness better-than-expected trends in
option volumes. ANGELONE and BSE would be the biggest beneficiaries of these trends.
 In the AMC sector, net equity inflows were buoyant in Oct’23 and Nov’23. The growth
in equity AUM was primarily backed by strong SIP flows (SIP flows reaching an all-time
high in Nov’23) and MTM gains (11% Nifty gain). Overall MF AUM, however, saw
flattish trends, owing to weak trends in fixed income AUM. Increase in equity AUM
would lead to improved performance for both CAMS and 360ONE.
 Private Life Insurance players saw a 19% growth in APE in Oct’23, followed by a 3%
decline in Nov’23 (on a base of 20% growth in Nov’22). We expect sequential recovery
in non-par share, leading to higher VNB margins.
Company
 Ex-crop, the general insurance sector experienced steady GWP growth of 10% and 12%
Angel One
in Oct’23 and Nov’23, respectively. Growth in the health segment moderated to
BSE
10%/13% YoY over Oct/Nov’23 as compared to 27% in 2QFY24. The motor segment
CAMS
too saw a lower growth of 10%/12% YoY in Oct/Nov’23 compared to 14% in 2QFY24.
ICICI Lombard
ICICI Securities Health segment loss ratios are expected to decline on the back of price hikes. We
IIFL Wealth expect STARHEAL and ICICIGI to report improvement in profitability.
MCX  We remain positive on the long-term growth potential of the non-lending financials,
Star Health given their broader themes of financialization and digitization of savings. Our top picks
HDFC Life in this space are ANGELONE, SBILIFE, and STARHEAL.
IPRU Life
SBI Life Incremental demat account additions moderates; sustained growth in cash
Max Financials volumes, with healthy F&O volumes in 3QFY24
 Retail segment's cash ADTO at NSE decreased by 19% MoM in Oct'23, but
rebounded in Nov'23 with a 12% MoM growth. Compared to 2QFY24, the
growth momentum of F&O ADTO was buoyant in 3QFY24 (retail F&O ADTO
moderated 3% MoM in Oct’23, whereas it grew 9% MoM in Nov’23).
 Incremental demat account additions moderates to 2.7m in Oct’23 and 2.8m in
Nov’23 (average 3m/month in 2QFY24). For ANGELONE, the average customer
additions moderated to 0.68m in Nov’23. However, the number of orders per
day showed a marginal increase in Nov’23 to 5.4m. We expect a healthy
increase in revenue and profitability for ANGELONE.
 BSE witnessed strong traction in derivatives volumes, resulting in a 14%/5%
market share in notional/premium turnover in Dec’23. Also, the increase in
transaction charges w.e.f 1st November 2023 is likely to improve profitability.
 MCX has migrated successfully to its new CDP (Commodity Derivatives
Platform). The company is in the process of getting a re-validation approval
from SEBI for many new products, which were in the pipeline. MCX has seen
strong traction in option volumes, although this has been partially offset by
lower volumes in Futures.

Prayesh Jain - Research Analyst (Prayesh.Jain@MotilalOswal.com)

Research 2020 Nitin Aggarwal (Nitin.Aggarwal@MotilalOswal.com) | Nemin Doshi (Nemin.Doshi@MotilalOswal.com)
October Analyst: 141
 December 2023 Results Preview | Sector: Financials – Non-Lending

Life Insurers: APE growth weakens on high base; VNB to be weak

 Life insurance players saw a healthy APE growth of 19% YoY in Oct’23. However,
Nov’23 saw a decline of 3% YoY on a strong base, wherein APE growth was 20%
in Nov’22. We expect demand for annuity, non-par (QoQ) and protection to
remain strong.
 VNB growth: VNB is expected to decline for all players, except HDFC Life, owing to
weakness in margins as the share of non-par is expected to be lower.

Steady premium (ex-crop) growth for general insurance sector; health claim
ratio to improve on the back of price hikes
 Ex-crop, the general insurance sector experienced steady GWP growth of 10%
and 12% in Oct’23 and Nov’23, respectively. The health segment reported a
moderated growth of 10%/13% YoY over Oct/Nov’23, whereas the Motor
segment saw a lower double-digit growth of 10% /12% YoY in Oct/Nov’23.
 For ICICIGI, the premium growth in Oct/Nov’23 stood at 5%/17% YoY. The GWP
growth for ICICIGI was primarily led by strong YoY expansion in the health
segment, with 22%/29% YoY growth in Oct/Nov’23.
 For Oct/Nov’23, STARHEAL saw a premium growth of 18%/17% YoY, driven by retail
growth of 18%/17% and group health business of 26%/18% (given lower base).
 Opex ratios are expected to benefit from operating leverage. Health segment
loss ratios are expected to improve YoY, due to the implemented price hikes.
Strong SIP flows, positive net inflows, and equity MTM gains drive mutual
fund AUM growth
 Mutual Fund AUM saw 20%+ YoY growth, led by strong 26%/27% growth in
equity AUM for Oct’23/Nov’23. Net equity inflows remained buoyant in Oct’23
and Nov’23. The growth in equity AUM was primarily backed by strong SIP flows
and MTM gains (higher in Nov’23).
 The share of equity AUM improved ~20bp in Oct’23 & ~50bp in Nov’23, reaching
53.3%. The SIP flows were strong for Oct’23 and Nov’23 (SIP flows reached its
all-time high in Nov’23).
 This would translate into healthy operating performance for both CAMS and 360
ONE in 3QFY24.

Exhibit 1: Quarterly Performance

Revenue/NEP/
EBITDA/PBT/UP/VNB (INR m) Net profit (INR m)
Gross Prem (INR m)
CMP Variance Variance Variance Variance Variance Variance
Sector Rating Dec-23 Dec-23 Dec-23
(INR) YoY (%) QoQ (%) YoY (%) QoQ (%) YoY (%) QoQ (%)
Angel One 3,480 BUY 7,019 51.8 4.0 4,199 38.9 3.1 3,149 37.8 3.7
ICICI Sec 718 Under review 13,034 48.1 4.4 5,846 54.9 2.7 4,397 56.4 3.8
360 One 710 BUY 4,521 9.0 5.9 2,349 2.8 10.3 1,886 10.0 1.3
CAMS 2,651 BUY 2,871 17.9 4.4 1,269 17.3 3.9 873 18.7 4.2
BSE 2,413 Neutral 3,809 86.7 21.1 1,625 150.7 13.8 1,390 120.9 16.7
MCX 3,200 Neutral 1,766 23.0 6.9 -171 N.A N.A -37 N.A N.A
Star Health 540 BUY 32,956 14.9 2.8 -57 N.A N.A 1,947 -7.5 55.4
ICICI Lombard 1,420 BUY 43,899 15.8 1.9 -1,698 N.A N.A 5,918 67.9 2.5
HDFC Life 647 Neutral 1,64,336 14 11 9,464 8 18 3,504 11 -7
ICICI Prudential 535 BUY 97,825 3 -2 5,138 -17 -11 2,773 26 14
SBI Life 1,433 BUY 1,99,942 4 -0.3 14,429 -4 -3 4,017 32 6
Max Financial 945 Neutral 74,107 18 12 4,293 -28 3 1,487 -49 -5
Non-Lending NBFC 648,083 12 4 46,686 -4 -2 31,303 5 3

January 2024 142

 December 2023 Results Preview | Sector: Financials – Non-Lending

Exhibit 2: Changes to our estimates

Old estimates (INR ) New estimates (INR ) Change (%)
Company FY24E FY25E FY24E FY25E FY24E FY25E
Angel One 137.6 160.7 141.2 172.7 2.6 7.5
ICICI Sec 46.0 50.9 50.0 57.2 8.7 12.3
360 One 20.9 26.0 21.2 26.6 1.4 2.3
CAMS 68.8 84.9 68.8 84.9 - -
BSE 22.2 51.1 33.1 60.6 49.6 18.5
MCX 19.1 76.7 19.1 76.7 - -
Star Health 16.2 22.0 14.3 19.6 -12.0 -11.0
ICICI Lombard 41.5 50.9 41.5 50.9 - -
HDFC Life 7.7 9.0 8.2 8.8 6.2 -1.9
ICICI Pru 7.3 8.3 7.4 9.5 2.0 15.0
SBI Life 20.1 23.2 20.3 23.8 0.8 2.6
Max Fin 13.4 15.7 13.3 16.3 -1.0 3.9

Exhibit 4: BSE seeing increasing market share in notional

Exhibit 3: Demat accounts surpass 135m turnover
Demat Accounts (m) NSE BSE

132 135 0% 0% 0% 1%
127 130 3%
118 121 123 7% 9% 10%
113 114 116 14%
106 108 110
100% 100% 100% 99% 97%
93% 91% 90%
86%
Jul'23

Oct'23
Jun'23
Feb'23

Apr'23
Dec'22

Jan'23

Sep'23

Apr/23

Aug/23

Oct/23
Jul/23
Nov'22

Nov'23
May'23

Jun/23
Mar'23

Aug'23

Dec/23
Sep/23

Nov/23
May/23

Source: NSDL, CDSL MOFSL Source: NSE, MOFSL

Exhibit 5: Momentum in NSE cash volumes continued Exhibit 6: Momentum in BSE cash volumes continued
NSE (INR t) BSE (INR b)

1,241
1,128
1,181

1,083

1,513

1,000
1,113
13.2
11.6
13.5

12.0
11.6
10.2
10.1
10.3

13.1
15.4
16.9
16.7
13.4
14.8

917

681

770

816

976
677

841

868

711

516
9.8

9.1

8.8
Aug-22

Aug-23

Aug-22
Mar-23

Mar-23

Aug-23
Jul-23
Jul-22

Oct-22

Jul-23

Oct-23

Jul-22

Oct-22

Oct-23
Jun-23

Jun-23
Dec-22
Jan-23

Apr-23

Sep-22

Jan-23
Dec-22

Apr-23

Sep-23
Sep-22

Feb-23

Sep-23

Feb-23
Nov-22
Nov-22

Nov-23

Nov-23
May-23

May-23

Source: NSE, MOFSL Source: BSE, MOFSL

Exhibit 7: MCX Option volumes surge Exhibit 8: MCX Futures volumes moderated
OPTFUT (INR b) FUTCOM (INR t)
5.8
4.9 4.8 4.7 5.0 4.7 4.6
4.2 4.1 4.3
4.0 3.9 4.0 4.1 3.8
12,237

15,237

19,566
14,088
15,197

19,558
20,165
20,625

20,282
9,096
6,619

9,502
7,693
9,001

9,149
Mar-23

Aug-23
Jul-23
Oct-22

Oct-23
Jun-23
Dec-22
Jan-23

Apr-23

Dec-23
Feb-23

Sep-23
Nov-22

Nov-23
May-23

Mar-23

Aug-23
Oct-22

Jul-23

Oct-23
Jun-23
Jan-23
Dec-22

Apr-23

Dec-23
Feb-23

Sep-23
Nov-22

Nov-23
May-23

Source: MCX, MOFSL Source: MCX, MOFSL

January 2024 143

 December 2023 Results Preview | Sector: Financials – Non-Lending

Exhibit 9: SIP flows remain strong (INR b) Exhibit 10: Share of equity AUM improved
Share of Equity AUM (%)

171
169
164

53.3
158

52.7
52.5
152
147
147
143
139

51.2
137
137
136
133
130

50.6
130
127

50.3
123
123

49.9
49.9
51
121

50

50

49.5
50
50
Mar-23
Aug-22

Aug-23
Jul-22

Oct-22

Jul-23

Oct-23
Jun-22

Jun-23
Nov-22

Nov-23
Dec-22

Apr-23
Sep-22

Jan-23
Feb-23

Sep-23
May-22

May-23

Mar-23

Aug-23
Feb-23

Sep-23
Oct-22

Jul-23

Oct-23
Jun-23
Apr-23
Dec-22

May-23
Jan-23
Nov-22

Nov-23
Source: AMFI, MOFSL Source: MCX, MOFSL

Exhibit 11: Net equity flows remained healthy Exhibit 12: Steady trend in general insurance premium
Net Equity Flows (INR b) General Insurance Premium (INR b)
372
325

292
298
291

265
256
255

243

237
236
228

219
210

209
199

204
199
192
170

182
161

129
114

95

86
78

90
64
Nov/22 (43)

Apr/23

Aug/23
Sep/22

Feb/23
Mar/23

Sep/23
Oct/23
Oct/22

Jul/23
Jun/23
Dec/22

May/23
Jan/23
Nov/22

Nov/23
Aug/23
Jul/23
Mar/23
Oct/22

Oct/23
Jun/23
Jan/23

Apr/23
Dec/22
Sep/22

Feb/23

Sep/23

Nov/23
May/23

Source: AMFI, MOFSL Source: GIC, MOFSL

Exhibit 13: Motor premium growth remains steady Exhibit 14: Steady Health segment growth
Motor Insururance Premium - YoY change (%) Health Insururance Premium - YoY change (%)
23 23 46
17 35 35 33
15 16 33
13 12 14 12 13 12 14 12
28
11 24 21
9 17 17 15
12
9 10 13
Mar/23

Mar/23
Aug/23

Aug/23
Oct/22

Oct/23

Oct/22

Oct/23
Jul/23

Jun/23
Jul/23
Jun/23
Jan/23

Apr/23

Sep/23

Jan/23
Feb/23

Apr/23
Dec/22

Dec/22
Sep/22

Feb/23

Sep/22

Sep/23
Nov/22

Nov/23

Nov/22

Nov/23
May/23
May/23

Source: GIC, MOFSL Source: GIC, MOFSL

Exhibit 15: Monthly APE for life insurance industry (INR b) Exhibit 16: Total APE YoY growth for private listed players
Monthly - Total APE (INR b) SBI Life HDFC Life IPRU Life Max Life
245 150

100
135
118 111 103 109 111 115 122 98 102 50
86
61
-

-50
Mar-23

Aug-23
Jul-23

Oct-23
Jun-23
Apr-23
Dec-22

Jan-23

Feb-23

Sep-23
Nov-22

Nov-23
May-23

Jun-23

Aug-23
Mar-23

Jul-23

Oct-23
Dec-22
Jan-23

Apr-23
Feb-23

Sep-23
Nov-22

Nov-23
May-23

Source: Life insurance council , MOFSL Source: Life insurance council, MOFSL

January 2024 144

 December 2023 Results Preview | Sector: Financials – Non-Lending

The tables below provide a snapshot of actual and estimated numbers for companies under the MOFSL coverage
universe. Highlighted columns indicate the quarter/financial year under review.

Angel One Buy

CMP INR3,480 | TP: INR4,100 (18%) EPS CHANGE (%): FY24|25: +2.6|+7.5
 Gross client additions weakened in Nov’23  With recovery in cash volumes, we expect an increase
 The number of orders per day improved during the in MTF book
quarter; F&O volumes continue to trend higher  Cost-to-income ratio is likely to be flattish during the
quarter
Quarterly Performance
Y/E March FY23 FY24E
FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
Revenue from Operations 4,203 4,559 4,625 5,313 5,198 6,747 7,019 7,321 18,700 26,285
Other Income 948 1,029 1,126 1,129 1,088 1,411 1,408 1,435 4,232 5,341
Total Income 5,151 5,588 5,751 6,442 6,286 8,158 8,426 8,756 22,932 31,626
Change YoY (%) 51.2 44.0 29.3 26.4 22.0 46.0 46.5 35.9 36.3 37.9
Operating Expenses 2,660 2,662 2,648 2,736 3,230 3,974 4,112 4,312 10,705 15,629
Change YoY (%) 52.5 30.5 20.9 19.0 21.4 49.3 55.3 57.6 29.4 46.0
Depreciation 65 69 80 89 89 112 115 119 303 435
PBT 2,427 2,857 3,023 3,616 2,967 4,072 4,199 4,325 11,924 15,563
Change YoY (%) 49.6 59.2 36.9 31.8 22.3 42.5 38.9 19.6 42.5 30.5
Tax Provisions 611 721 739 946 759 1,035 1,050 1,056 3,016 3,900
Net Profit 1,816 2,137 2,284 2,670 2,208 3,037 3,149 3,268 8,907 11,663
Change YoY (%) 49.6 59.0 38.7 30.3 21.6 42.1 37.8 22.4 42.5 30.9

CAMS Buy
CMP INR2,651 | TP: INR3310 (+25%) EPS CHANGE (%): FY24|25: +0|+0
 While flows remained buoyant during the quarter,  The share of equities continued to improve, which
MTM gains were robust with Nifty reaching its all-time would be favorable for yields.
high.
 Operating leverage to improve profitability  Growth in non-MF businesses will be keenly tracked,
especially, AIF/PMS RTA and Insurance Repository
Quarterly Performance
Y/E March FY23 FY24E
FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
Revenue from Operations 2,366 2,424 2,436 2,492 2,613 2,751 2,871 2,934 9,718 11,169
Change YoY (%) 17.6 6.5 2.5 2.5 10.4 13.5 17.9 17.7 6.8 14.9
Employee expenses 933 901 871 876 950 977 1,028 1,056 3,581 4,010
Operating expenses 267 274 282 294 327 333 339 337 1,123 1,336
Other Expenses 188 189 200 232 236 220 235 256 803 947
Total Operating Expenses 1,388 1,363 1,354 1,401 1,512 1,530 1,602 1,649 5,506 6,293
Change YoY (%) 28.2 11.9 8.8 7.0 9.0 12.2 18.4 17.7 13.4 14.3
EBITDA 979 1,061 1,082 1,091 1,101 1,221 1,269 1,285 4,212 4,876
Other Income 44 74 71 79 97 96 95 103 268 391
Depreciation 136 147 155 164 165 174 181 174 603 694
Finance Cost 18 18 20 20 20 20 19 17 76 76
PBT 869 970 978 985 1,012 1,124 1,164 1,196 3,802 4,496
Change YoY (%) 2.3 0.5 -4.4 -0.4 16.4 15.9 19.0 21.4 -0.7 18.3
Tax Provisions 223 249 242 242 255 286 291 292 956 1,124
Net Profit 646 721 736 744 757 838 873 904 2,846 3,372
Change YoY (%) 2.2 -0.6 -4.9 0.7 17.1 16.2 18.7 21.6 -0.8 18.5

January 2024 145

 December 2023 Results Preview | Sector: Financials – Non-Lending

ICICI Securities Under review

CMP INR718 | Under Review
 Recovery in cash volumes and growth in the derivative
segment to drive retail revenue
 Increase in primary market activities would lead to
increase in IE & IB allied revenues.
EPS CHANGE (%): FY24|25: +8.7|+12.3
 MTM gains on mutual funds to drive improvement
distribution income
 Operating leverage would lead to moderation in cost-
to-income ratio

Quarterly Performance
Y/E March FY23 FY24E
FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
Revenue from Operations 7,948 8,656 8,799 8,852 9,344 12,490 13,034 13,811 34,255 48,679
Total Income 7,948 8,656 8,799 8,852 9,344 12,490 13,034 13,811 34,255 48,679
Change YoY (%) 6.3 1.1 -6.6 -0.8 17.6 44.3 48.1 56.0 -0.4 42.1
Operating Expenses 4,277 4,621 5,025 5,320 5,701 6,797 7,187 7,460 19,243 27,145
Change YoY (%) 29.2 19.8 16.3 21.7 33.3 47.1 43.0 40.2 21.3 41.1
PBT 3,670 4,036 3,774 3,532 3,644 5,693 5,846 6,352 15,013 21,534
Change YoY (%) -11.9 -14.3 -26.0 -22.4 -0.7 41.0 54.9 79.8 -19.0 43.4
Tax Provisions 936 1,032 964 905 935 1,457 1,450 1,541 3,836 5,384
Net Profit 2,735 3,004 2,810 2,627 2,708 4,235 4,397 4,810 11,176 16,151
Change YoY (%) -12.0 -14.5 -26.1 -22.8 -1.0 41.0 56.4 83.1 -19.2 44.5

360ONE WAM Buy

CMP INR710 | | TP: INR840 (+18%) EPS CHANGE (%): FY24|25: +1.4|+2.3
 Improvement in revenue trajectory led by positive  Cost-to-income ratio is forecasted to improve QoQ due
MTM gains and TBR income to scale benefits
 Overall yields likely to remain steady as we expect  Outlook on the new business ventures in terms of
stable product mix QoQ mass-affluent segment and entry into new geographies
will be keenly monitored.
Quarterly Performance
Y/E March FY23 FY24E
FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
Net Revenues 3,747 3,825 4,150 3,929 4,060 4,270 4,521 4,688 15,649 17,539
Change (%) 32.2 21.7 9.7 -7.1 8.4 11.6 9.0 19.3 11.9 12.1
ARR Assets Income 3,017 2,843 3,053 2,797 3,240 3,110 3,421 3,542 10,495 13,313
TBR Assets Income 730 982 1,097 1,132 820 1,160 1,100 1,146 5,154 4,226
Operating Expenses 1,670 1,794 1,863 1,850 2,090 2,140 2,172 2,175 7,184 8,577
Change (%) 9.1 3.7 -16.1 -21.3 25.1 19.3 16.6 17.5 -8.4 19.4
Cost to Income Ratio (%) 44.6 46.9 44.9 47.1 51.5 50.1 48.0 46.4 45.9 48.9
Operating Profits 2,077 2,031 2,286 2,079 1,970 2,130 2,349 2,513 8,465 8,962
Change (%) 59.3 43.7 46.4 10.7 -5.1 4.9 2.8 20.9 37.7 5.9
Other Income -60 225 -54 -78 290 140 100 70 37 600
Profit Before Tax 2,017 2,255 2,232 2,001 2,260 2,270 2,449 2,583 8,502 9,562
Change (%) 33.6 19.1 12.7 -6.6 12.1 0.7 9.7 29.1 13.1 12.5
Tax 449 512 517 447 403 408 563 633 1,924 2,008
Tax Rate (%) 22.2 22.7 23.2 22.3 17.8 18.0 23.0 24.5 22.6 21.0
PAT 1,568 1,744 1,715 1,554 1,857 1,862 1,886 1,949 6,578 7,554
Change (%) 34.2 21.5 12.0 -6.2 18.4 6.8 10.0 25.4 13.8 14.8
PAT Margins (%) 41.9 45.6 41.3 39.6 45.7 43.6 41.7 41.6 42.0 43.1

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 December 2023 Results Preview | Sector: Financials – Non-Lending

ICICI Lombard Buy

CMP INR1,420 | TP: INR1,700 (+20%) EPS CHANGE (%) FY24|25: 0|0
 Premium growth to be strong, driven by the health  Management change and further traction with ICICI
segment (more so the Group segment) Bank will be vital
 Claim ratios are expected to be flat, whereas expense  Combined ratio to be under pressure, on the back of
ratio is expected to inch up sequentially higher loss and expense ratio.
Quarterly Performance
Y/E March FY23 FY24E
FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
Net earned premium 34,682 38,366 37,921 37,260 38,873 43,061 43,899 41,495 1,48,229 1,67,328
Total Income 39,783 44,990 43,620 52,556 45,380 50,492 51,688 49,507 1,80,949 1,97,067
Change YoY (%) 3.8 18.1 13.2 13.4 14.1 12.2 18.5 -5.8 12.2 8.9
Incurred claims 24,999 27,933 26,663 27,662 28,815 30,451 30,949 29,772 1,07,256 1,19,988
Total Operating Expenses 36,615 39,888 40,855 39,768 42,068 44,521 45,597 44,689 1,57,126 1,76,875
Change YoY (%) -3.1 19.0 14.1 9.7 14.9 11.6 11.6 12.4 9.6 12.6
Underwriting profit -1,933 -1,523 -2,935 -2,508 -3,195 -1,460 -1,698 -3,193 -8,898 -9,546
Adj Net Profit 3,490 4,625 3,525 4,370 3,904 4,493 5,918 5,486 16,011 19,121
Change YoY (%) 79.6 3.6 11.0 39.8 11.8 -2.9 67.9 25.6 26.0 19.4
Rep Net Profit 3,490 5,905 3,525 4,370 3,904 5,773 5,918 4,808 17,291 20,401
Claims ratio 72.1 72.8 70.3 74.2 74.1 70.7 70.5 71.7 72.4 71.7
Commission ratio 2.2 3.5 4.2 2.3 12.5 17.4 14.7 14.7 3.0 14.8
Expense ratio 29.9 28.8 29.9 27.7 17.2 15.8 17.0 16.4 29.1 16.6
Combined ratio 104.1 105.1 104.4 104.2 103.8 103.9 102.2 102.8 104.5 103.1

Star Health Buy

CMP INR540 | TP: INR730 (35%) EPS CHANGE (%): FY24|25: -12.0|-11.0
 Retail health premium growth likely to be strong at  With an absolute increase in claims, claims ratio to
15%+ YoY moderate on a sequential basis.
 Expense ratio is expected to remain flat YoY as Star  Combined ratio to see a slight moderation as claims
would invest in other distribution channels ratio declines
Quarterly Performance
Y/E March FY23 FY24E
FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
Net earned premium 26,871 27,948 28,672 29,125 30,438 32,056 32,956 35,742 1,12,616 1,31,191
Total Income 28,090 29,181 29,829 30,530 31,898 33,566 34,616 37,535 1,17,630 1,37,615
Change YoY (%) 20.6 16.1 13.9 11.4 13.6 15.0 16.0 22.9 14.3 18.8
Incurred claims 17,811 19,060 18,278 18,054 19,909 22,022 22,410 21,645 73,204 85,986
Total Operating Expenses 25,303 28,079 27,415 29,780 28,983 32,839 33,013 35,688 1,10,570 1,30,524
Change YoY (%) -4.8 -4.3 -20.3 4.9 14.5 17.0 20.4 19.8 -6.9 18.0
Underwriting profit 1,568 -131 1,258 -654 1,454 -784 -57 54 2,046 668
Net Profit 2,132 931 2,105 1,018 2,879 1,253 1,947 2,183 6,186 8,261
Claims ratio 66.3 68.2 63.7 62.0 65.4 68.7 68.0 60.6 65.0 65.5
Commission ratio 13.7 13.0 13.7 14.1 13.1 13.7 13.7 13.7 13.7 13.6
Expense ratio 18.2 16.6 17.4 15.3 19.3 16.8 17.1 15.6 16.7 17.0
Combined ratio 98.2 97.9 94.8 91.4 97.8 99.2 98.8 89.9 95.3 96.1

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BSE Neutral
CMP INR 2,413| TP: INR2600 (8%) EPS CHANGE (%) FY24|25: +49.6|+18.5
 Transaction revenue likely to improve as volumes in  MF transaction income is likely to improve, driven by a
the cash segment recovered. spike in BSE STAR MF transactions.
 Traction in the derivative segment visible, which will  Increase in transaction charges w.e.f. 1st Nov’23 is likely
increase option volumes for BSE. to enhance profitability.

Cons. Quarterly perf.

Y/E March FY23 FY24E
FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q
Revenue from operations 1,869 1,977 2,040 2,270 2,153 3,144 3,809 4,360 8,154 13,466
YoY Change (%) 19.0 4.8 5.9 10.9 15.2 59.0 86.7 92.1 9.7 65.2
Total Expenditure 1,256 1,386 1,392 1,234 1,437 1,716 2,184 2,555 6,181 7,891
EBITDA 613 591 648 1,036 716 1,429 1,625 1,805 1,973 5,575
Margins (%) 32.8 29.9 31.8 45.6 33.3 45.4 42.7 41.4 24.2 41.4
Depreciation 104 122 170 207 214 227 229 235 603 905
Interest 76 74 65 60 65 85 90 95 275 335
Investment income 109 421 410 445 556 525 525 531 1,384 2,136
PBT before EO expense 542 815 823 1,214 992 1,642 1,832 2,006 2,479 6,472
Exceptional items -116 -457 -258 -84 4,048 -13 0 0 0 4,066
PBT 426 359 566 1,131 5,040 1,629 1,832 2,006 2,479 10,538
Tax 135 215 230 336 762 636 641 596 916 2,634
Rate (%) 32 60 41 30 15 39 35 30 37 25
P/L of Asso. Cos. 109 150 141 92 119 190 199 -8 492 500
Reported PAT 400 294 477 886 4,398 1,183 1,390 1,402 2,055 8,403
Adj PAT 479 477 629 945 961 1,191 1,390 1,402 2,055 4,337
YoY Change (%) -23 -48 -19 24 999 303 192 58 -16 309
Margins (%) 25.6 24.1 30.8 41.6 44.6 37.9 36.5 32.1 25.2 62.4

MCX Neutral
CMP INR3200 | TP: INR3160 (-1%) EPS CHANGE (%): FY24|25: +0|+0
 Futures ADTO has displayed marginal improvement  MCX has migrated successfully to its new CDP
during the quarter despite the launch of mini contracts (Commodity Derivatives Platform).
 Options volumes continued to surge, led by high  The company is in the process of getting a re-validation
volatility in commodity prices approval from SEBI for many new products, which
were in the pipeline.
Quarterly Performance
FY23 FY24E
FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
Sales 1,088 1,274 1,436 1,338 1,458 1,651 1,766 1,750 5,135 6,624
Yo-Y Gr. (%) 24.2 53.1 60.3 25.6 34.0 29.6 23.0 30.8 40.0 29.0
EBITDA 493 656 327 21 107 -287 -171 1,060 1,497 709
Tax 106 135 90 86 58 16 -10 211 416 275
Rate (%) 20.1 17.2 18.5 52.6 21.6 -9.9 22.0 17.7 21.3 22.0
Profit from associate -6 -5 -7 -23 -13 -10 0 0 -50 -23
PAT 415 641 388 55 197 -191 -37 983 1,490 952
Y-o-Y Gr. (%) 4 96 13 -85 -53 -130 -110 1,703 4 -36
EPS (INR) 8.2 12.6 7.6 1.1 3.9 -3.7 -0.7 19.3 29.2 18.7
Total volumes (INR t) 28.7 35.9 40.7 42.0 51.8 67.0 73.6 74.2 147.3 266.5
Y-o-Y Gr. (%) 49.6 71.2 89.0 60.7 80.7 86.3 80.6 76.8 67.7 80.9

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HDFC Life Neutral

CMP: INR647 | TP: INR730(12%) EPS CHANGE (%): FY24|25:+6.2|-1.9
 New business premium to see steady growth, driven by  Expect VNB growth to remain healthy and margins to expand
Annuity/Non-PAR segments and retail protection QoQ.
 Credit life to see healthy traction as disbursement  Improvement in persistency ratio and commentary on
momentum across lending institutions remains strong growth outlook are key monitorables
Quarterly performance (INR b)
FY23 FY24E
Policy holder's A/c (INR b) FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
First year premium 17.1 24.2 27.2 44.7 18.5 25.7 29.7 44.9 113.2 118.7
Growth (%) 32.9% 16.6% 28.8% 73.5% 8.4% 5.9% 8.9% 0.4% 40.6% 4.8%
Renewal premium 51.0 69.1 71.9 92.5 58.0 78.4 89.5 132.0 284.5 357.9
Growth (%) 31.1% 37.2% 29.7% 26.1% 13.8% 13.5% 24.5% 42.7% 30.4% 25.8%
Single premium 32.4 39.5 46.6 59.0 40.2 45.4 47.4 56.7 177.6 189.6
Growth (%) 30.6% -12.5% 1.5% 31.1% 24.0% 14.7% 1.7% -4.0% 10.3% 6.8%
Gross premium inc. 100.5 132.8 145.8 196.3 116.7 149.4 166.6 233.6 575.3 666.3
Growth (%) 31.3% 14.2% 18.9% 36.1% 16.2% 12.5% 14.3% 19.0% 25.2% 15.8%
PAT 3.6 3.3 3.2 3.6 4.2 3.8 3.5 5.2 13.6 17.6
Growth (%) 19.1% 19.0% 15.2% 0.3% 15.4% 15.5% 11.2% 45.2% 12.6% 29.4%
Key metrics (INRb)
New business APE 20.6 28.5 32.6 51.6 23.3 30.5 34.4 50.5 131.0 137.7
Growth (%) 32.2 11.7 25.5 69.3 12.8 6.8 5.6 -2.1 35.5 5.1
VNB 5.2 7.7 8.8 15.1 6.1 8.0 9.5 14.5 36.7 38.0
Growth (%) 27.0 13.6 26.1 68.8 17.8 4.0 8.2 -4.3 37.4 3.5
AUM (INR b) 2,134 2,249 2,338 2,388 2,533 2,649 2,773 2,902 2,388 2,902
Growth (%) 17.7 17.6 20.1 17.0 18.7 17.8 18.6 21.5 17.0 21.5
Key Ratios (%)
VNB Margins (%) 25.1 27.0 26.8 29.3 26.2 26.2 27.5 28.6 27.6 27.6
Solvency ratio (%) 183.0 210.0 209.0 203.0 200.0 194.0 198.0 197.7 203.3 197.7

ICICI Prudential Life Buy

CMP: INR535 | TP: INR660 (24%) EPS CHANGE (%): FY24|25: +2|+15
 Expect new business premium to see healthy growth.  Expense ratio outlook to be the key monitorable
 Expect VNB growth to remain healthy and margins to expand.  Expect growth in the Non-Linked Savings business to remain
healthy and a recovery in the Protection business
Quarterly Performance (INR b)
Policy holder's A/c FY23 FY24E
FY23 FY24E
(INR b) 1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
First year premium 10.4 14.4 13.8 26.3 10.2 15.3 14.6 38.2 64.9 78.4
Growth (%) 18.0% -7.2% -10.9% 32.9% -1.5% 5.9% 6.0% 45.2% 8.9% 20.7%
Renewal premium 38.9 56.4 57.5 72.3 41.6 58.9 58.5 84.7 225.2 243.7
Growth (%) -5.9% 1.3% 5.7% 6.3% 6.8% 4.4% 1.7% 17.2% 2.6% 8.2%
Single premium 23.3 28.1 26.5 31.3 21.9 30.1 28.1 15.7 109.2 95.8
Growth (%) 25.9% 16.8% 12.6% 6.9% -5.9% 7.0% 6.0% -49.9% 14.5% -12.3%
Gross premium income 72.6 99.0 97.8 129.9 73.7 104.3 101.2 138.7 399.3 417.8
Growth (%) 5.7% 3.8% 4.7% 10.9% 1.5% 5.4% 3.5% 6.7% 6.6% 4.6%
PAT 1.6 2.0 2.2 2.3 2.1 2.4 2.8 3.1 8.1 10.7
Growth (%) -55.1% -29.0% 27.2% 32.9% 22.4% 25.7% 30.8% 7.5% 32.2%
Key metrics (INRb)
New Business APE 15.2 20.0 18.2 33.0 14.6 20.6 17.4 35.3 86.4 87.9
Growth (%) 24.7 1.1 -5.5 26.5 -3.9 3.2 -4.4 7.0 11.7 1.8
VNB 4.7 6.2 6.2 10.6 4.4 5.8 5.1 10.9 27.6 26.1
Growth (%) 31.6 20.6 20.0 36.1 -7.0 -7.1 -16.9 2.9 27.7 -5.4
AUM 2,301 2,443 2,519 2,512 2,664 2,719 2,828 2,982 2,512 2,982
Growth (%) 3.1 3.0 6.0 4.4 15.8 11.3 12.3 18.7 4.4 18.7
Key Ratios (%)
VNB Margins (%) 31.0 31.1 33.9 32.0 30.0 28.0 29.5 30.8 32.0 29.7
Solvency ratio (%) 204 201 212 209 203 199 205 200 209 200

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 December 2023 Results Preview | Sector: Financials – Non-Lending

SBI Life Buy

CMP: INR1,433 | TP: INR1,700 (+19%) EPS CHANGE (%): FY24|25: +0.8|+2.6
 Growth in New business premium to remain healthy  Cost leadership to continue
 Expect VNB growth to remain healthy, while margins to  Expect protection mix to improve and Non-PAR to remain
show a modest growth healthy; growth commentary to be key
Quarterly Performance (INR b)
Policy holder's A/c FY23 FY24E
FY23 FY24E
(INRb) 1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
First year premium 25.7 34.8 50.6 40.9 26.4 46.3 46.7 44.0 152.0 163.4
Growth (%) 83% -4% 24% 6% 3% 33% -8% 7% 17% 8%
Renewal premium 57.6 91.2 109.1 119.4 73.5 101.2 117.0 158.2 377.3 449.9
Growth (%) 14% 17% 13% 10% 28% 11% 7% 33% 13% 19%
Single premium 30.2 40.2 33.7 39.9 35.7 54.2 33.7 38.5 143.9 162.1
Growth (%) 56% 20% -24% 42% 18% 35% 0% -4% 15% 13%
Gross premium income 113.5 166.2 193.3 200.1 135.6 201.8 197.4 240.6 673.2 775.3
Growth (%) 35% 13% 6% 14% 19% 21% 2% 20% 15% 15%
PAT 2.6 3.8 3.0 7.8 3.8 3.8 4.0 8.5 17.2 20.3
Growth (%) 18% 53% -16% 16% 45% 1% 32% 10% 14% 18%
Key metrics (INRb)
New Business APE 29.0 39.3 54.3 45.5 30.3 51.8 50.1 47.8 166.4 179.6
Growth (%) 79.0 -1.0 18.8 10.2 4.5 31.7 -7.7 5.1 17.2 8.0
VNB 8.8 12.4 15.1 14.4 8.7 14.9 14.4 14.2 50.7 52.3
Growth (%) 131.6 24.0 31.3 23.1 -1.1 20.2 -4.4 -1.0 37.0 3.1
AUM 2,624 2,826 3,000 3,073 3,283 3,452 3,579 3,641 3,073 3,641
Growth (%) 13.3 15.7 16.8 14.9 25.1 22.1 19.3 18.5 14.9 18.5
Key Ratios (%)
VNB margins (%) 30.4 31.6 27.8 31.6 28.7 28.5 28.8 29.8 30.1 29.1
Solvency ratio (%) 221.0 219.0 225.0 215.0 215.0 212.0 216.0 187.5 215.0 187.5

Max Financial Neutral

CMP: INR954 | TP: INR970 (2%) EPS CHANGE (%): FY24|25: -1|+3.9
 Expect healthy growth in premiums  Expect the proprietary channel to exhibit healthy trends
 Expect VNB growth to remain healthy and margins to expand

Quarterly Performance (INR b)

Policy holder's A/c FY23 FY24E
FY23 FY24E
(INR b) 1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
First Year premium 9.2 11.1 14.6 24.1 9.9 15.3 15.1 24.0 59.0 64.3
Growth (%) 14.2% -9.3% -5.5% 38.3% 8.0% 37.7% 3.3% -0.3% 10.9% 9.1%
Renewal premium 26.2 39.1 40.2 58.3 30.1 42.0 49.0 67.2 163.8 188.3
Growth (%) 16.7% 12.9% 17.5% 8.4% 15.1% 7.5% 21.7% 15.1% 12.9% 14.9%
Single premium 5.7 7.8 8.0 9.1 8.7 8.9 8.4 6.4 30.6 32.4
Growth (%) 30.1% 21.3% 26.9% 4.0% 52.8% 14.2% 4.8% -29.4% 18.3% 5.9%
Gross premium income 41.0 58.0 62.8 91.5 48.7 66.3 74.1 96.0 253.4 285.0
Growth (%) 17.8% 8.8% 12.2% 14.4% 18.7% 14.2% 17.9% 4.8% 13.1% 12.5%
PAT 0.9 0.5 2.9 0.7 1.0 1.6 1.5 1.6 4.4 5.7
Growth (%) 18.2% -25.4% 155.7% -56.5% 13.2% 196.2% -49.4% 143.5% 13.1% 30.7%
Key metrics (INRb)
New Business APE 10.1 11.9 15.1 25.4 11.1 16.5 15.9 24.0 62.0 67.6
Growth (%) 15.3 -7.2 -5.2 38.2 10.3 38.8 5.3 -5.3 11.3 8.9
VNB 2.1 3.7 5.9 7.7 2.5 4.2 4.3 7.2 19.5 18.1
Growth (%) 23.8 -0.3 49.7 31.4 16.0 11.5 -27.6 -6.7 27.6 -7.1
AUM (INRb) 1,071 1,134 1,184 1,229 1,291 1,342 1,398 1,585 1,229 1,585
Growth (%) 14.3 13.3 15.5 14.3 20.5 18.4 18.1 29.0 14.3 29.0
Key Ratios (%)
VNB Margins (%) 21.1 31.3 39.3 30.3 22.2 25.2 27.0 29.9 31.2 26.8
Solvency ratio (%) 196.0 196.0 200.0 190.0 188.0 184.0 189.0 180.5 192.7 180.5

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Healthcare
Company Operational performance to decelerate further
Alembic Pharma. Base effects kick in in US generics; DF on sustainable growth path
Alkem Lab.
Ajanta Pharma Pharma companies under our coverage (excluding APHS, MAXHEALT, MEDANTA,
Apollo Hospitals SOLARA) are expected to report healthy YoY earnings growth of 19.7% in 3QFY24.
Aurobindo Pharma We expect aggregate sales to increase by 10.3% YoY to INR693b, aided by strong
Biocon traction in US generics and a healthy performance in the domestic formulation (DF)
Zydus Lifesciences. segment. EBITDA is expected to grow 15.2% YoY to INR159b, led by a higher share of
Cipla niche launches in US generics and low operational costs (lower freight/staff costs).
Divi’s Lab. However, owing to lower depreciation/tax rate, PAT is expected to grow at a higher
Dr. Reddy’s Lab.
rate of 19.7% YoY to INR97b. For hospitals, we expect profitability to improve as the
Eris Lifesciences
optimization of case mix/payor mix should drive better realization and operating
Gland Pharma
Glenmark Pharma.
leverage. We expect APHS to deliver 10.5%/17.4%/54% YoY growth in sales/
Global Health EBITDA/PAT. MEDANTA is expected to deliver sales/EBITDA/PAT growth of
Granules India 19%/27.5%/52% YoY. MAXHEALT is also expected to post a robust performance,
GSK Pharma. with sales/EBITDA/PAT witnessing 14%/13%/21% YoY growth.
IPCA Lab.
DF: YoY growth steady at high-single digits
Laurus Labs
Lupin
In 3QFY24, we expect aggregate sales in the DF segment to grow 8.7% YoY to
Max Healthcare INR184b for the companies under our coverage, led by healthy growth in Anti-
Piramal Pharma infective, Gastro and Pain therapies, which outperformed IPM during the quarter.
Sun Pharma. However, to some extent, it is likely to be offset by moderate growth in Anti-
Torrent Pharma. Diabetic and Derma therapies. Companies are focusing on improving MR
productivity and launching niche products that would improve sales growth and
profitability. In the large cap space, we expect TRP/ALKEM to deliver sales growth of
16%/11% YoY, backed by new launches, focus on OTC business, better MR
productivity, and strong growth in respective key therapies. We expect SUNP/LPC to
report 8% YoY growth each in DF revenue, led by steady traction in existing
therapies and an increase in MR productivity. We estimate ERIS/AJP to deliver
15%/12% YoY growth in DF sales, due to strong growth in respective portfolios and
new launches.
US: Partial deceleration in YoY growth trend
For our coverage companies, we expect 8.3% YoY growth in US sales to USD2.2b for
the quarter. However, this growth is lower compared to the last four-quarter
average growth of 15.8% YoY. The easing in pricing pressure and increased traction
in limited competition products, such as g-Revlimid and Spiriva, are expected to
strengthen the YoY growth uptrend in US generics. Particularly, ARBP/LPC/CIPLA are
expected to deliver 19%/16%/15% YoY growth in the quarter. Growth in these
companies will be led by niche launches (new launches for ARBP/g-Spiriva for LPC/g-
Revlimid for CIPLA). SUNP’s US sales could grow 9% YoY, led by the specialty
portfolio. While TRP had successful compliance at Dahej facility, the product
approval is yet to pick-up. Hence, we expect moderate 5.6% YoY growth in TRP’s US
sales for the quarter. For GNP/ALKEM, US sales are expected to decline 7%/3% YoY.
In 3QFY24, our coverage companies received 53 ANDA approvals (final) compared to
51 in 2QFY24.

Tushar Manudhane - Research Analyst (Tushar.Manudhane@motilaloswal.com)

Research Analyst: Sumit Gupta (Sumit.G@MotilalOswal.com) | Akash Dobhada (Akash.Dobhada@MotilalOswal.com
October 2020 151
 December 2023 Results Preview | Sector: Healthcare

TRP/Medanta/APHS to outperform in the healthcare pack

In 3QFY24, we expect SUNP/TRP/CIPLA to deliver 21%/38%/21% earnings growth
YoY, led by better traction in existing products/new launches. DRRD/LAURUS may
report an earnings decline of 7.6%/28% YoY, led by a deceleration in CS/API business
(LAURUS) and higher opex costs (DRRD).
We expect LPC’s earnings to increase by ~2.5x YoY, outperforming the rest of our
coverage companies. Additionally, ARBP/DIVI are expected to see earnings growth
of ~71%/48% due to a low base of last year. ARBP had higher R&D spending/tax rate
in 3QFY23, while DIVI witnessed lower sales in the CS segment and higher raw
material costs in 3QFY23.
We expect APHS/MEDANTA/MAXHEALTH to post earnings growth of 54%/52%/24%
due to lower operational loss in Healthco (APHS), bed additions and better
occupancy (MEDANTA); and the optimization of payor mix/case mix (MAXHEALTH).
Estimates cut for GRAN and BIOS
We have cut our FY24E/FY25E EPS for BIOS by 5%/2% to factor in a delay in niche
biosimilar approval.
Top Ideas: Cipla (well-positioned for superior execution in DF/US), SUNP (enhancing
specialty offering), Max Healthcare (superior executor), and Medanta (robust
runway for sustainable growth)

Exhibit 1: Summary of quarterly performance

SALES (INR M) EBDITA (INR M) NET PROFIT (INR M)
CMP
RECO Var Var Var Var Var Var
Sector (INR) Dec-23 Dec-23 Dec-23
% YoY % QoQ % YoY % QoQ % YoY % QoQ
Ajanta Pharma 2154 Buy 10,292 5.9 0.1 2,686 24.2 -7.6 1,917 17.6 2.9
Alembic Pharma 765 Neutral 15,913 5.5 -0.2 2,323 -6.6 11.6 1,470 11.0 7.3
Alkem Lab 5123 Neutral 32,422 6.6 -5.8 5,901 -1.5 -21.0 4,522 -0.6 -33.0
Apollo Hospitals 5748 Buy 47,092 10.5 -2.8 5,934 17.4 -5.4 2,361 53.8 1.9
Aurobindo Pharma 1080 Neutral 73,284 14.4 1.5 15,243 59.7 8.6 8,231 70.8 5.8
Biocon 256 Neutral 36,898 25.5 6.6 8,560 24.2 15.5 2,120 -4.8 46.6
Cipla 1251 Buy 64,769 11.5 -3.0 15,544 10.4 -10.3 9,700 21.1 -17.4
Divis Labs 3913 Neutral 20,331 19.1 6.5 5,652 38.4 13.3 4,048 47.8 14.1
Dr Reddy’ s Labs 5819 Neutral 68,720 1.5 -0.1 19,104 -7.1 -4.3 12,112 -7.6 -8.8
Eris Lifescience 905 Neutral 4,867 15.0 -3.7 1,738 26.7 -4.1 1,093 7.6 -11.5
Gland Pharma 1907 Buy 14,178 51.1 3.2 3,459 19.5 6.7 2,335 0.7 20.3
Glenmark Pharma 856 Neutral 32,390 -6.5 1.0 5,409 -12.8 7.1 1,965 -11.7 40.7
Global Health 951 Buy 8,262 19.0 -2.1 2,074 27.5 -5.1 1,225 52.0 -2.2
Granules India 412 Buy 12,305 7.4 3.4 2,399 3.7 12.7 1,295 4.2 26.9
GSK Pharma 1953 Neutral 8,586 7.0 -10.3 2,215 -3.1 -23.5 1,734 -1.5 -20.3
IPCA Labs. 1119 Neutral 21,209 37.2 4.3 3,351 44.5 -7.1 1,562 31.5 -7.6
Laurus Labs 433 Buy 14,170 -8.3 15.7 3,273 -18.9 74.2 1,462 -28.0 295.6
Lupin 1313 Sell 48,384 11.9 -4.0 8,467 52.3 -8.3 4,181 148.3 -15.4
Max Healthcare 688 Buy 16,690 14.0 -2.9 4,590 13.3 -5.2 3,541 24.8 0.3
Piramal Pharma 139 Buy 20,043 16.8 4.9 3,067 156.1 15.4 821 LP 1,536.2
Sun Pharma 1260 Buy 1,22,687 11.6 2.2 31,530 14.1 4.3 25,037 20.5 4.1
Torrent Pharma 2296 Neutral 27,405 10.0 3.0 8,742 18.3 6.0 4,408 37.7 14.2
Zydus Lifesciences 698 Neutral 43,961 3.3 0.6 10,353 15.1 -2.7 6,619 14.1 -10.3
Healthcare 7,64,857 10.5 0.5 1,71,616 15.4 0.3 1,03,759 20.3 -1.2

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 December 2023 Results Preview | Sector: Healthcare

Exhibit 2: Relative performance – three months (%) Exhibit 3: Relative performance – one-year (%)
Nifty Index MOFSL Healthcare Index Nifty Index MOFSL Healthcare Index
118 140

112 125

106 110

100 95
94
80
Oct-23

Dec-23
Sep-23

Nov-23

Mar-23

Jun-23
Dec-22

Dec-23
Sep-23
Source: Bloomberg, MOFSL

Exhibit 4: DF sales to witness steady growth in 3QFY24

Agg DF sales (INRb) DF sales growth YoY (%)

13.8
11.5
9.3 8.4 8.2 8.7
8.0 7.9

-2.7

157 147 163 176 170 161 176 190 184

3QFY22 4QFY22 1QFY23 2QFY23 3QFY23 4QFY23 1QFY24 2QFY24 3QFY24E

Source: MOFSL, Company

Exhibit 5: US sales growth momentum to decline in 3QFY24

US sales (USDb) Growth YoY (%)

27.2

12.3 10.5 13.4

5.1 8.3
0.6 (0.2)
(3.4)

1.8 1.8 1.8 1.9 2.1 2.0 2.2 2.2 2.2

3QFY22 4QFY22 1QFY23 2QFY23 3QFY23 4QFY23 1QFY24 2QFY24 3QFY24E

Source: MOFSL, Company
Exhibit 6: 53 ANDAs approved on an aggregate basis for our
coverage universe in 3QFY24 Exhibit 7: Expect sales to grow 10.3% YoY in 3QFY24
9.0 9.0 Approval YoY Sales Growth (%)
8.0 18.0
16.2
14.8
13.2
5.0 11.3 10.7 10.5 9.8 11.6 11.9 12.1
4.0 10.3
3.0 3.0 5.9
2.0 2.0 2.0 2.0 2.0 4.3
1.0 1.0
0.0 0.0
2QFY22

1QFY24
2QFY21
3QFY21
4QFY21
1QFY22

3QFY22
4QFY22
1QFY23
2QFY23
3QFY23
4QFY23

2QFY24
3QFY24E
SUNP
GRAN

TRP

AJP
CIPLA
ALPM

DRRD

BIOS
GNP

IPCA
ZYDUS

LAURUS
LPC

ALKEM

GLAND
ARBP

Source: MOFSL, Company Source: MOFSL, Company

January 2024 153

 December 2023 Results Preview | Sector: Healthcare

Exhibit 8: EBITDA to grow 15.2% YoY in 3QFY24E Exhibit 9: PAT to witness 19.7% YoY growth for 3QFY24E

Aggregate EBITDA Growth (%) 49.3 Aggregate PAT Growth (%)

31.3 30.2 31.3
23.4 33.2 33.7
15.9 15.2 24.9 19.7
12.6 20.1
8.7 10.5 10.8 14.7
3.9 1.8 3.3 3.9
1.2 5.2 (0.9)(0.1)
(12.6) (9.2)
(16.1)

2QFY21
3QFY21
4QFY21
1QFY22
2QFY22
3QFY22
4QFY22
1QFY23
2QFY23
3QFY23
4QFY23
1QFY24
2QFY24
3QFY24E
2QFY24
2QFY21
3QFY21
4QFY21
1QFY22
2QFY22
3QFY22
4QFY22
1QFY23
2QFY23
3QFY23
4QFY23
1QFY24

3QFY24E
Source: MOFSL, Company Source: MOFSL, Company
*Sales, EBITDA, PAT YoY growth figures exclude JUBLPHRM due to limited historical data. It also excludes SOLARA, APHS, MEDANTA and
MAXHEALT data.

Exhibit 10: Comparative valuation

CMP EPS (INR) PE (x) PB (x) ROE (%)
Company Name INR Reco FY24E FY25E FY26E FY24E FY25E FY26E FY24E FY25E FY26E FY24E FY25E FY26E
Healthcare 33.4 28.0 24.1 4.4 3.9 3.5 13.3 14.0 14.3
Ajanta Pharma 2,154 Buy 61.1 74.4 89.5 35.2 28.9 24.1 6.9 5.9 5.0 21.1 21.9 22.3
Alembic Pharma 765 Neutral 28.6 33.8 38.0 26.7 22.6 20.1 3.1 2.8 2.5 12.1 12.9 13.0
Alkem Lab 5,123 Neutral 149.2 173.0 183.7 34.3 29.6 27.9 5.9 5.1 4.5 18.4 18.5 17.1
Apollo Hospitals 5,748 Buy 63.7 92.5 132.2 90.3 62.1 43.5 11.4 9.7 7.9 13.8 17.4 20.7
Aurobindo Pharma 1,080 Neutral 51.2 58.7 67.5 21.1 18.4 16.0 2.1 1.9 1.7 10.6 11.0 11.4
Biocon 256 Neutral 7.2 13.1 16.9 35.6 19.5 15.2 1.7 1.6 1.5 4.7 8.3 10.0
Cipla 1,251 Buy 47.4 53.4 57.5 26.4 23.4 21.8 3.9 3.4 3.0 14.6 14.3 13.6
Divis Labs 3,913 Neutral 60.9 81.1 97.4 64.2 48.2 40.2 7.5 6.8 6.1 12.1 14.7 15.9
Dr Reddy’ s Labs 5,819 Neutral 296.7 308.8 324.9 19.6 18.8 17.9 3.5 3.0 2.6 19.5 17.2 15.5
Eris Lifescience 905 Neutral 33.0 33.5 40.7 27.5 27.0 22.2 4.9 4.3 3.6 19.1 17.0 17.6
Gland Pharma 1,907 Buy 54.4 65.7 74.5 35.1 29.0 25.6 3.5 3.2 2.8 10.6 11.5 11.6
Glenmark Pharma 856 Neutral 24.1 39.3 48.0 35.5 21.8 17.8 2.3 2.1 1.9 6.8 10.1 11.2
Global Health 951 Buy 18.0 21.7 25.6 52.8 43.8 37.1 9.0 7.7 6.6 18.4 19.0 19.2
Granules India 412 Buy 19.4 27.1 34.9 21.2 15.2 11.8 3.0 2.5 2.1 15.3 18.1 19.4
GSK Pharma 1,953 Neutral 38.1 42.1 46.4 51.2 46.4 42.1 15.8 14.1 12.4 30.8 30.4 29.5
IPCA Labs. 1,119 Neutral 24.5 36.9 49.0 45.7 30.3 22.9 4.5 4.0 3.5 10.2 13.9 16.2
Laurus Labs 433 Buy 9.1 16.9 19.0 47.4 25.7 22.8 5.2 4.5 3.8 11.6 18.7 18.1
Lupin 1,313 Sell 36.0 40.7 48.3 36.5 32.3 27.2 4.2 3.8 3.3 12.3 12.3 13.0
Max Healthcare 688 Buy 14.4 17.5 21.3 47.8 39.4 32.2 7.1 6.0 5.1 15.9 16.5 17.0
Piramal Pharma 139 Buy 1.4 3.0 4.6 97.5 46.0 29.8 2.1 2.0 1.8 2.5 4.9 7.1
Sun Pharma 1,260 Buy 39.5 45.6 53.7 31.9 27.6 23.5 4.8 4.1 3.6 15.9 16.0 16.4
Torrent Pharma 2,296 Neutral 50.1 66.3 79.5 45.8 34.6 28.9 9.3 4.7 4.7 23.3 26.9 32.3
Zydus Lifesciences 698 Neutral 32.6 33.7 36.1 21.4 20.7 19.3 3.4 3.0 2.7 17.3 15.4 14.6

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The tables below provide a snapshot of actual and estimated numbers for companies under the MOFSL coverage
universe. Highlighted columns indicate the quarter/financial year under review.
Ajanta Pharma Buy
CMP: INR2,154 | TP: INR2,475 (15%) EPS CHANGE (%): FY24|25: 0.8|(0.4)
 Expect DF sales growth to be 12% YoY to INR3.3b, led by  We expect Africa business to outperform industry growth due
healthy progress in Derma/Respiratory. to normalization of supply chain.
 US sales are likely to decline 16% YoY (high base of last  Watch out for growth prospects of branded generic business
year), but may be stable QoQ due to limited price erosion. and opex for core markets.
Consol. - Quarterly perf. (INR m)
Y/E March FY23 FY24E FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
Net Sales 9,509 9,381 9,718 8,818 10,210 10,284 10,292 10,440 37,426 41,227
YoY Change (%) 27.1 6.0 16.0 1.3 7.4 9.6 5.9 18.4 12.0 10.2
Total Expenditure 6,992 7,318 7,555 7,107 7,397 7,378 7,606 7,880 28,972 30,260
EBITDA 2,518 2,063 2,162 1,711 2,813 2,907 2,686 2,560 8,454 10,966
YoY Change (%) 14.4 -21.5 -9.7 -22.1 11.7 40.9 24.2 49.6 -10.3 29.7
Margins (%) 26.5 22.0 22.3 19.4 27.6 28.3 26.1 24.5 22.6 26.6
Depreciation 318 327 333 330 332 337 342 353 1,308 1,364
EBIT 2,200 1,736 1,829 1,381 2,482 2,570 2,344 2,207 7,146 9,602
YoY Change (%) 16.2 -24.9 -12.0 -26.8 12.8 48.0 28.1 59.8 -12.5 34.4
Margins (%) 23.1 18.5 18.8 15.7 24.3 25.0 22.8 21.1 19.1 23.3
Interest 9 10 28 11 9 23 13 7 58 52
Other Income 48 394 239 123 121 85 95 111 803 412
PBT before EO expense 2,239 2,120 2,040 1,493 2,594 2,631 2,426 2,312 7,892 9,963
Extra-Ord expense 20 90 357 -28 97 128 0 0 -439 225
PBT 2,219 2,030 1,683 1,521 2,691 2,759 2,426 2,312 7,453 10,188
Tax 472 464 338 299 609 806 509 363 1,574 2,288
Effective Rate (%) 21.3 22.9 20.1 19.7 22.6 29.2 21.0 15.7 21.1 22.5
Reported PAT 1,746 1,566 1,345 1,222 2,082 1,953 1,917 1,948 5,879 7,899
Adj PAT 1,762 1,635 1,630 1,200 2,007 1,862 1,917 1,948 6,227 7,734
YoY Change (%) 14.4 -11.4 -15.0 -25.6 13.9 13.9 17.6 62.4 -10.0 24.2
Margins (%) 18.4 16.7 16.4 13.4 19.4 18.0 18.5 18.5 16.3 18.6

Alembic Pharma Neutral

CMP: INR784 | TP: INR750 (-2%) EPS CHANGE (%): FY24|25: 0|0
 Expect flat YoY growth in US sales to USD53m due  DF sales to witness 7% YoY growth due to healthy traction in
to continued price erosion/limited approvals, offset Gynecology, and expansion in animal health division.
partly by new launches.  Outlook on potential approvals for US generics market.
 Expect API sales to be steady YoY INR3.3b.
Quarterly perf. (Consol.) (INR m)
Y/E March FY23 FY24E FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
Net Sales 12,621 14,750 15,090 14,065 14,862 15,949 15,913 14,973 56,526 61,696
YoY Change (%) -4.8 14.1 18.7 -0.7 17.7 8.1 5.5 6.5 6.5 9.1
Total Expenditure 11,475 12,423 12,603 11,833 12,874 13,867 13,590 12,481 48,333 52,812
EBITDA 1,147 2,328 2,488 2,232 1,987 2,083 2,323 2,492 8,194 8,884
YoY Change (%) -51.4 -9.5 -2.7 -21.2 73.3 -10.5 -6.6 11.7 -17.8 8.4
Margins (%) 9.1 15.8 16.5 15.9 13.4 13.1 14.6 16.6 14.5 14.4
Depreciation 521 517 535 741 662 676 630 592 2,314 2,560
EBIT 626 1,811 1,953 1,490 1,325 1,407 1,693 1,900 5,880 11,444
Interest 88 124 146 144 144 157 138 121 502 560
Other Income 11 3 4 9 117 102 125 142 27 485
PBT before EO expense 548 1,690 1,811 1,356 1,298 1,352 1,680 1,920 5,405 6,249
Extra-Ord expense 1,150 160 130 110 0 0 0 0 1,550 0
PBT -602 1,530 1,681 1,246 1,298 1,352 1,680 1,920 3,855 6,249
Tax -15 180 326 -364 92 -19 210 280 126 562
Rate (%) 2.5 11.7 19.4 -29.2 7.0 -1.4 12.5 14.6 3.3 9.0
MI & P/L of Asso. Cos. 72 17 136 85 0 0 0 60 309 60
Reported PAT -659 1,334 1,220 1,525 1,207 1,371 1,470 1,580 3,420 5,627
Adj PAT 463 1,475 1,324 1,034 1,207 1,371 1,470 1,580 4,296 5,627
Margins (%) 3.7 10.0 8.8 7.4 8.1 8.6 9.2 10.6 7.6 9.1

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 December 2023 Results Preview | Sector: Healthcare

Alkem Labs Neutral

CMP: INR5,123| TP: INR4540 (-11%) EPS CHANGE (%): FY24|25: 0|0
 Expect DF sales to grow 11% YoY, led by better off-take in  Expect US sales to decline 3% YoY to USD91m, due to
Gastrointestinal/anti-diabetic portfolio and improved MR reduced pace of approval/filings and pricing erosion.
productivity.
 Progress on biosimilar portfolio for emerging as well as  Outlook on the reducing operational cost.
regulated market.
Quarterly Perf. (Consolidated) (INR b)
Y/E March FY23 FY24E FY23E FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
Net Revenues 25.8 30.8 30.4 29.0 29.7 34.4 32.4 31.4 116.0 127.9
YoY Change (%) -5.7 10.0 16.1 16.9 15.2 11.7 6.6 8.1 9.1 10.2
Total Expenditure 23.0 26.3 24.4 25.5 25.8 26.9 26.5 26.6 64.4 65.7
EBITDA 2.7 4.5 6.0 3.5 3.9 7.5 5.9 4.7 16.8 22.0
YoY Change (%) -53.9 -27.3 20.2 4.8 42.4 64.5 -1.5 34.0 -18.2 31.0
Margins (%) 10.6 14.7 19.7 12.2 13.1 21.7 18.2 15.1 14.5 17.2
Depreciation 0.8 0.8 0.8 0.8 0.7 0.7 0.7 0.6 3.1 2.8
EBIT 2.0 3.8 5.2 2.7 3.2 6.7 5.2 4.1 13.7 19.2
YoY Change (%) -62.3 -31.7 23.7 8.2 60.8 78.7 -0.9 50.4 -21.0 9.7
Margins (%) 7.6 12.2 17.1 9.5 10.7 19.6 15.9 13.2 11.8 15.0
Interest 0.3 0.2 0.3 0.3 0.3 0.3 0.3 0.2 1.1 1.1
Other Income 0.5 0.5 0.5 0.7 0.7 0.6 0.7 0.7 2.2 2.7
PBT before EO Exp 2.2 4.0 5.4 3.1 3.5 7.1 5.5 4.6 14.8 20.7
EO Exp/(Inc) 0.7 0.0 0.0 1.0 0.0 0.6 0.0 0.0 1.7 0.6
PBT after EO Exp 1.5 4.0 5.4 2.1 3.5 6.5 5.5 4.6 13.0 20.2
Tax 0.2 0.5 0.8 1.4 0.7 0.3 0.9 0.8 3.0 2.6
Rate (%) 13.5 13.6 14.6 68.0 18.4 5.1 16.0 16.3 20.2 12.6
PAT (pre Minority Interest) 1.3 3.5 4.6 0.7 2.9 6.1 4.6 3.9 10.1 17.5
Minority Interest 0.0 0.2 0.1 0.0 0.0 -0.1 0.1 0.2 0.2 0.3
Reported PAT 1.3 3.3 4.5 0.7 2.9 6.2 4.5 3.7 9.8 17.3
Adj Net Profit 1.9 3.3 4.5 2.9 2.9 6.8 4.5 3.7 12.7 17.8
YoY Change (%) -59.8 -39.7 12.2 28.2 52.3 104.1 -0.6 25.8 -23.2 40.7

Apollo Hospitals Buy

CMP: INR5,748 | TP: INR6,580 (+14%) EPS CHANGE (%): FY24|25: 0.0|1.9
 Minimal bed addition to keep sales/EBITDA growth in
 Optimization of revenue per store to drive 11% YoY
check for the hospital segment (10%/3% YoY to
growth in pharmacy sales for the quarter
INR24b/INR5.6b).
 Expect operational loss to decline to INR100m from
 Progress on recent hospital deals (Kolkata/Pune)
INR387m QoQ at healthco level.
Consolidated - Quarterly Earning (INR m)
Y/E March FY23 FY24E FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
Gross Sales 37,956 42,511 42,636 43,022 44,178 48,469 47,092 45,070 166,124 184,809
YoY Change (%) 0.9 14.4 17.2 21.3 16.4 14.0 10.5 4.8 13.3 11.2
Total Expenditure 33,049 36,857 37,582 38,141 39,088 42,194 41,158 39,083 145,628 161,523
EBITDA 4,908 5,654 5,054 4,881 5,090 6,275 5,934 5,987 20,496 23,286
YoY Change (%) -5.6 -8.1 -13.9 5.4 3.7 11.0 17.4 22.7 -6.2 13.6
Margins (%) 12.9 13.3 11.9 11.3 11.5 12.9 12.6 13.3 12.3 12.6
Depreciation 1,478 1,550 1,534 1,591 1,669 1,634 1,590 1,496 6,152 6,389
Interest 927 927 1,000 954 1,062 1,113 1,120 1,019 3,808 4,314
Other Income 161 226 354 164 282 222 250 262 903 1,016
PBT before EO expense 2,663 3,402 2,874 2,500 2,641 3,750 3,474 3,735 11,439 13,600
Extra-Ord expense/(Income) 0 0 0 0 0 -19 0 0 0 -19
PBT 2,663 3,402 2,874 2,500 2,641 3,769 3,474 3,735 11,439 13,619
Tax -695 1,142 1,035 1,080 966 1,300 973 711 2,562 3,949
Rate (%) -26.1 33.6 36.0 43.2 36.6 34.5 28.0 19.0 22.4 29.0
MI & Profit/Loss of Asso. Cos. 187 220 303 -25 9 140 140 211 687 500
Reported PAT 3,171 2,040 1,535 1,445 1,666 2,329 2,361 2,813 8,190 9,169
Adj PAT 1,623 2,040 1,535 1,725 1,666 2,317 2,361 2,813 6,923 9,156
YoY Change (%) -43.2 -23.7 -36.9 -5.3 2.6 13.6 53.8 63.1 -29.3 32.2
Margins (%) 4.3 4.8 3.6 4.0 3.8 4.8 5.0 6.2 4.2 5.0

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 December 2023 Results Preview | Sector: Healthcare

Aurobindo Pharma Neutral

CMP: INR1080 | TP: INR1110 (3%) EPS CHANGE (%): FY24|25: (2.2)|0.9
 Expect US sales to grow 32% YoY to USD437m supported  Expect EU sales growth of 13% YoY to INR19b on
by launch of g-Revlimid and improved execution in increased product offerings and expansion into newer
injectable portfolio. markets
 Outlook on reducing the operational cost and filing of
 Update on a scale-up of Pen-G project.
biosimilar products in US and EU markets.
Consolidated - Quarterly Earning (INR b)
Y/E March FY23 FY24E FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
Net Sales 62.4 57.4 64.1 64.7 68.5 72.2 73.3 71.6 248.6 285.6
YoY Change (%) 9.4 -3.4 6.7 11.4 9.9 25.8 14.4 10.6 6.0 14.9
EBITDA 10.2 10.5 9.5 10.0 11.5 14.0 15.2 14.3 40.3 55.1
YoY Change (%) -15.3 -11.3 -6.1 2.9 12.4 33.4 59.7 42.9 -8.1 36.6
Margins (%) 16.4 18.3 14.9 15.5 16.8 19.4 20.8 20.0 16.2 19.3
Depreciation 2.8 3.0 3.2 3.5 3.3 4.2 4.2 3.3 12.4 14.9
EBIT 7.5 7.5 6.3 6.6 8.2 9.9 11.1 11.1 27.9 40.3
YoY Change (%) -19.8 -15.5 -11.7 -8.9 10.7 30.7 75.2 68.4 -14.5 44.3
Interest 0.1 0.3 0.4 0.6 0.6 0.7 0.4 0.1 1.4 1.8
Other Income 0.4 0.6 0.8 1.1 0.8 1.9 0.9 0.8 2.9 4.3
PBT before EO expense 7.7 7.9 6.7 7.1 8.5 11.0 11.5 11.7 29.4 42.8
Forex loss/(gain) 0.3 0.5 -0.1 -0.2 -0.4 0.3 0.0 0.0 0.4 -0.1
Exceptional (expenses)/income -0.6 0.0 0.0 0.0 -0.7 0.0 0.0 0.0 -0.6 -0.7
PBT 6.8 7.4 6.8 7.4 8.1 10.7 11.5 11.7 28.4 42.2
Tax 1.6 1.1 1.9 2.2 2.4 3.2 3.3 3.6 6.8 12.6
Rate (%) 23.2 15.3 27.8 30.4 29.7 30.1 29.0 30.9 24.1 30.0
Minority Interest 0.0 0.0 0.0 0.1 0.0 -0.1 -0.1 0.1 0.1 0.0
Reported PAT 5.2 6.2 4.9 5.1 5.7 7.6 8.2 8.0 21.4 29.5
Adj PAT 5.9 6.6 4.8 5.1 5.9 7.8 8.2 8.0 22.5 30.0
YoY Change (%) -21.4 -4.5 -14.4 -10.3 0.9 17.2 70.8 55.8 -12.9 33.2
Margins (%) 9.4 11.6 7.5 7.9 8.7 10.8 11.2 11.2 9.0 10.5

Biocon Neutral
CMP: INR256 | TP: INR240 (-6%) EPS CHANGE (%): FY24|25: (4.8)|(2.2)
 Expect biologics sales to grow 40% YoY to INR18.8b, led  Expect generic business to be stable due to pricing erosion and
by market share gain in existing products. planned shutdown.
 Expect syngene sales momentum to sustain at 20% YoY  Update on the commercialization of new facility acquired from
to INR9.4b with contribution from all the key segments. Eywa pharma.
Quarterly performance (Consolidated)
Y/E March FY23 FY24E FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3QE 4Q
Net Sales 21.7 23.2 29.4 36.5 34.2 34.6 36.9 40.6 110.8 146.4
YoY Change (%) 23.1 26.1 35.3 51.5 57.9 49.2 25.5 11.4 35.3 32.1
Total Expenditure 17.0 18.5 22.5 27.8 27.1 27.2 28.3 30.6 85.8 113.2
EBITDA 4.6 4.7 6.9 8.7 7.1 7.4 8.6 10.0 25.0 33.1
Margins (%) 21.4 20.3 23.4 23.9 20.8 21.4 23.2 24.7 22.5 22.6
Depreciation 2.2 2.3 3.0 3.6 3.6 3.9 3.7 3.5 11.1 14.7
EBIT 2.5 2.4 3.9 5.1 3.6 3.5 4.8 6.5 13.8 18.5
Interest 0.2 0.3 1.2 2.5 2.3 2.5 2.3 2.2 4.2 9.3
Other Income 0.8 0.7 0.8 0.5 0.9 1.6 0.9 0.8 2.7 4.2
Extraordinary Income -0.4 -0.2 -3.2 2.7 0.0 -0.2 0.0 0.0 -1.0 -0.2
Share of Profit/Loss from Associates -0.4 -0.3 -0.6 -0.4 -0.3 -0.2 -0.1 0.1 -1.7 -0.5
PBT 2.2 2.3 -0.2 5.3 1.8 2.1 3.4 5.3 9.6 12.6
Tax 0.3 1.5 0.0 0.8 0.4 0.4 0.6 1.0 2.6 2.4
Rate (%) 13.4 64.3 16.2 15.4 19.1 19.6 19.4 18.5 26.6 19.0
Minority Interest 0.2 0.4 0.2 1.0 0.5 0.5 0.6 0.3 1.8 1.8
PAT 1.7 0.5 -0.4 3.5 1.0 1.3 2.1 4.0 5.2 8.4
Adj PAT 2.0 1.7 2.2 1.5 1.0 1.4 2.1 4.0 7.5 8.6
Margins (%) 7.9 2.0 -1.4 9.5 2.9 3.6 5.7 9.9 4.7 5.7

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 December 2023 Results Preview | Sector: Healthcare

Cipla Buy
CMP: INR1251 | TP: INR1,450 (16%) EPS CHANGE (%): FY24|25: 0|0
 US sales to grow 15% YoY to USD225m, led by market share  Expect DF sales to grow by 7% YoY, on better off-take in
gain of existing products. respiratory/cardiac/urology and market share gain.
 Progress on g-Advair/gAbraxane and filing of g-Symbicort.  Update on USFDA remediation measures at
Goa/Pithampur facility.
Quarterly Performance (Consolidated) (INR b)
Y/E March FY23 FY24E FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
Net Revenues 53.8 58.3 58.1 57.4 63.3 66.8 64.8 61.8 227.5 256.7
YoY Change (%) -1.4 5.6 6.0 9.1 17.7 14.6 11.5 7.7 4.8 12.8
Total Expenditure 42.3 44.4 44.0 45.7 48.3 49.4 49.2 49.6 176.4 196.6
EBITDA 11.4 13.9 14.1 11.7 14.9 17.3 15.5 12.2 51.1 60.1
YoY Change (%) -11.7 13.3 14.3 23.6 30.7 24.8 10.4 4.3 8.8 17.4
Margins (%) 21.3 23.8 24.2 20.4 23.6 26.0 24.0 19.8 22.5 23.4
Depreciation 2.5 3.0 2.7 3.5 2.4 2.5 2.7 2.9 11.7 10.4
EBIT 8.9 10.9 11.4 8.3 12.5 14.9 12.9 9.3 39.4 49.6
YoY Change (%) -14.0 12.0 15.4 25.5 41.1 36.4 13.6 12.7 8.0 25.9
Margins (%) 16.5 18.7 19.5 14.4 19.8 22.3 19.9 15.1 17.3 19.3
Interest 0.2 0.3 0.3 0.3 0.2 0.3 0.3 0.3 1.1 1.0
Other Income 1.0 1.0 1.1 1.3 1.4 1.8 1.2 1.0 4.5 5.3
Profit before Tax 9.7 11.6 12.2 9.3 13.7 16.4 13.8 10.0 42.8 54.0
One-time (expense)/income 0.0 -0.6 0.0 -1.8 0.0 -0.4 0.0 0.0 -2.5 -0.4
PBT after EO expense 9.7 11.0 12.2 7.5 13.7 15.9 13.8 10.0 40.4 53.5
Tax 2.7 3.0 4.1 2.2 3.8 4.4 3.9 3.2 12.0 15.2
Rate (%) 27.5 26.0 33.7 24.0 27.5 26.8 27.9 31.9 28.1 28.2
Minority Interest 0.2 0.1 0.1 0.0 0.0 0.2 0.2 -0.1 0.3 0.4
Reported PAT 6.9 7.9 8.0 5.3 10.0 11.3 9.7 6.9 28.0 37.9
Adj PAT 6.9 8.5 8.0 7.1 10.0 11.7 9.7 6.9 30.5 38.3
YoY Change (%) -12.9 19.8 9.9 16.1 45.1 37.7 21.1 -2.5 7.4 25.7

Divis Labs Neutral

CMP: INR3913 | TP: INR3580 (-9%) EPS CHANGE (%): FY24|25: (3.2)|(3.1)
 On low base of past year, DIVI is expected to deliver 19%  Update on pricing of generic API portfolio.
YoY growth in sales for the quarter.
 Impact on freight costs due to recent global political  Update on the pipeline of iodine and sartan-based products.
turmoil.
Quarterly Performance (INRm)
Y/E March FY23 FY24E FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
Net Sales 22,545 18,545 17,077 19,508 17,780 19,090 20,331 21,047 77,675 78,248
YoY Change (%) 15.0 -6.7 -31.5 -22.5 -21.1 2.9 19.1 7.9 -13.3 0.7
Total Expenditure 14,078 12,335 12,994 14,590 12,740 14,100 14,679 14,507 53,997 56,026
EBITDA 8,467 6,210 4,083 4,918 5,040 4,990 5,652 6,540 23,678 22,222
YoY Change (%) -0.6 -24.7 -62.9 -55.5 -40.5 -19.7 38.4 33.0 -39.0 -6.1
Margins (%) 37.6 33.5 23.9 25.2 28.3 26.1 27.8 31.1 30.5 28.4
Depreciation 837 857 868 870 930 950 960 980 3,432 3,820
EBIT 7,630 5,353 3,215 4,048 4,110 4,040 4,692 5,561 20,246 18,403
YoY Change (%) -2.0 -28.4 -68.5 -60.4 -46.1 -24.5 45.9 37.4 -43.3 -9.1
Interest 0 0 1 2 0 10 5 5 7 20
Other Income 320 492 674 662 810 750 710 625 2,150 2,895
PBT before EO Income 7,950 5,845 3,888 4,707 4,920 4,780 5,397 6,181 22,390 21,278
Forex gain /(Loss) 564 308 467 -42 30 -90 0 0 1,297 -60
PBT 8,514 6,153 4,354 4,665 4,950 4,690 5,397 6,181 23,687 21,218
Tax 1,493 1,216 1,288 1,455 1,360 1,210 1,349 1,173 5,453 5,092
Rate (%) 17.5 19.8 29.6 31.2 27.5 25.8 25.0 19.0 23.0 24.0
PAT 7,021 4,937 3,066 3,210 3,590 3,480 4,048 5,008 18,234 16,126
Adj. PAT 6,556 4,690 2,738 3,239 3,568 3,547 4,048 5,008 17,222 16,171
YoY Change (%) 2.6 -23.9 -67.2 -61.5 -45.6 -24.4 47.8 54.6 -41.2 -6.1
Margins (%) 31.1 26.6 18.0 16.5 20.2 18.2 19.9 23.8 23.5 20.6
Adj. EPS 24.7 17.7 10.3 12.2 13.4 13.4 15.2 18.9 64.9 60.9

January 2024 158

 December 2023 Results Preview | Sector: Healthcare

Dr Reddy’s Labs Neutral

CMP: INR5819 | TP: INR5400 (-7%) EPS CHANGE (%): FY24|25: 0|0
 US sales to grow 4% YoY to USD384m due to steady  Update on filings, approvals and launches in China.
traction in existing products and continued price erosion.
 India revenue to grow 6% YoY; Strong traction in  Watch out for key approvals and launches in NA over next 12-
respiratory to be offset by double-digit decline in cardiac 15M to drive growth beyond g-Revlimid.
therapy.
Quarterly Performance - IFRS
Y/E March FY23 FY24E FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
Sales 49.9 63.1 67.7 60.3 67.4 68.8 68.7 67.4 240.9 272.3
YoY Change (%) 1.3 9.4 27.3 15.6 35.2 9.1 1.5 11.7 13.5 13.0
Total Expenditure 39.5 45.0 47.1 47.1 46.9 48.8 49.6 50.7 178.8 196.1
EBITDA 10.3 18.0 20.6 13.2 20.5 20.0 19.1 16.7 62.1 76.2
YoY Change (%) 14.5 35.0 71.1 25.4 97.8 10.7 -7.1 26.8 38.3 22.7
Margins (%) 20.7 28.6 30.4 21.9 30.3 29.0 27.8 24.8 25.8 28.0
Amortization 3.1 3.2 3.3 3.2 3.6 3.8 3.9 3.7 12.7 15.0
EBIT 7.3 14.9 17.3 10.0 16.9 16.1 15.3 13.0 49.5 61.3
YoY Change (%) 19.1 43.5 91.2 32.2 131.5 8.3 -11.8 30.3 49.4 23.9
Margins (%) 14.6 23.6 25.5 16.6 25.0 23.4 22.2 19.3 20.5 22.5
Other Income 2.8 0.3 0.2 1.2 1.1 1.6 1.0 0.9 4.5 4.6
PBT before EO expenses 10.1 15.2 17.5 11.2 18.0 17.7 16.2 14.0 53.9 65.9
One-off income/(expense) 4.5 0.9 -1.1 2.1 0.5 1.4 0.0 0.0 6.4 1.9
Profit before Tax 14.7 16.1 16.3 13.3 18.5 19.1 16.2 14.0 60.4 67.8
PBT after EO Expenses 14.6 16.1 16.3 13.3 18.5 19.1 16.2 14.0 60.4 67.8
Tax 2.8 5.0 3.9 3.7 4.4 4.3 4.1 3.6 15.3 16.5
Rate (%) 19.0 30.9 23.7 27.6 24.0 22.7 25.3 25.7 25.3 24.3
Reported Profit 11.9 11.1 12.5 9.6 14.0 14.8 12.1 10.4 45.1 51.3
Adjusted PAT 8.2 11.4 13.1 8.1 13.7 13.3 12.1 10.4 40.8 49.4
YoY Change (%) 43.6 14.9 84.2 23.7 66.6 16.5 -7.6 28.6 39.3 21.2
Margins (%) 16.4 18.1 19.4 13.4 20.3 19.3 17.6 15.4 16.9 18.1

Eris Lifesciences Neutral

CMP: INR905 | TP: INR900 (-1%)
 Expect 15% YoY growth in sales led by strong performance
in Oaknet and double-digit growth in top therapies.
 Update on integration of the brands acquired from Biocon.
EPS CHANGE (%): FY24|25: (2.9)|(5.7)
 Update on the launch Gliclazide-Dapagliflozin and
GliclazideSitagliptin.
 Update on debt repayment and outlook on margin
improvement.

Consolidated - Quarterly Earning (INR m)

Y/E March FY23 FY24E FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
Gross Sales 3,986 4,605 4,233 4,028 4,666 5,053 4,867 5,718 16,851 20,305
YoY Change (%) 14.1 28.0 27.4 31.7 17.1 9.7 15.0 42.0 25.1 20.5
Total Expenditure 2,694 3,091 2,861 2,839 2,969 3,242 3,130 3,716 11,484 13,056
EBITDA 1,292 1,514 1,372 1,189 1,697 1,811 1,738 2,002 5,368 7,249
Margins (%) 32.4 32.9 32.4 29.5 36.4 35.8 35.7 35.0 31.9 35.7
Depreciation 234 286 299 351 409 421 430 468 1,171 1,728
Interest 72 71 30 89 174 163 120 110 262 567
Other Income 27 52 22 10 10 35 30 27 112 102
PBT before EO expense 1,013 1,209 1,065 759 1,125 1,262 1,218 1,451 4,046 5,056
PBT 1,013 1,209 1,065 759 1,125 1,262 1,218 1,451 4,046 5,056
Tax 82 16 63 144 188 39 146 233 305 607
Rate (%) 8.1 1.3 5.9 19.0 16.7 3.1 12.0 16.1 7.5 12.0
MI & Profit/Loss of Asso. Cos. 15 13 13 39 12 11 21 25 80 84
Reported PAT 946 1,207 1,015 654 948 1,234 1,093 1,243 3,822 4,533
Adj PAT 946 1,207 1,015 654 948 1,234 1,093 1,243 3,822 4,533
YoY Change (%) -11.3 1.9 0.8 -18.2 0.3 2.3 7.6 90.0 -5.8 18.6
Margins (%) 23.7 26.2 24.0 16.2 20.3 24.4 22.4 21.7 22.7 22.3

January 2024 159

 December 2023 Results Preview | Sector: Healthcare

GSK Pharma Neutral

CMP: INR1,953 | TP: INR1780 (-9%) EPS CHANGE (%): FY24|25: 0|0
 Expect YoY growth trend to get better in 3QFY24.  Expect 7% YoY growth in sales to INR8.6b.
 Update on any new launches from parent portfolio.  Progress on steps taken to mitigate impact of NLEM led
price revision.
Quarterly Performance (Consolidated)
Y/E March FY23 FY24E FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
Net Sales 7,451 9,169 8,023 7,875 7,617 9,570 8,586 9,000 32,517 34,773
YoY Change (%) 3.7 -1.8 -1.7 -2.7 2.2 4.4 7.0 14.3 -0.8 6.9
Total Expenditure 5,962 6,599 5,736 6,177 6,178 6,675 6,371 7,073 24,474 26,297
EBITDA 1,489 2,569 2,287 1,697 1,439 2,895 2,215 1,927 8,043 8,476
YoY Change (%) 12.2 -0.4 15.6 -3.1 -3.4 12.7 -3.1 13.5 5.3 5.4
Margins (%) 20.0 28.0 28.5 21.6 18.9 30.3 25.8 21.4 24.7 24.4
Depreciation 158 164 164 172 164 181 166 146 658 656
EBIT 1,331 2,406 2,123 1,526 1,276 2,714 2,049 1,782 7,385 7,820
YoY Change (%) 15.6 0.0 18.0 -4.6 -4.2 12.8 -3.5 16.8 6.2 5.9
Margins (%) 17.9 26.2 26.5 19.4 16.7 28.4 23.9 19.8 22.7 22.5
Interest 7 4 1 7 3 4 4 9 18 20
Other Income 276 220 234 277 364 282 282 2 1,006 930
PBT before EO Expense 1,600 2,622 2,356 1,796 1,637 2,992 2,327 1,775 8,373 8,730
Tax 438 687 597 565 487 817 593 373 2,288 2,270
Rate (%) 27.4 26.2 25.3 31.5 29.8 27.3 25.5 21.0 25.1 26.0
Adjusted PAT 1,162 1,934 1,759 1,230 1,150 2,175 1,734 1,402 6,086 6,460
YoY Change (%) 8.3 1.4 12.6 2.7 -1.1 12.5 -1.5 14.0 6.0 6.1
Margins (%) 15.6 21.1 21.9 15.6 15.1 22.7 20.2 15.6 18.7 18.6
One-off Expense/(Income) 0 0 114 -104 -173 0 0 0 10 -173
Reported PAT 1,162 1,934 1,646 1,334 1,323 2,175 1,734 1,402 6,075 6,633

Gland Pharma Buy

CMP: INR1907 | TP: INR2200 (15%) EPS CHANGE (%): FY24|25: 0|0
 Expect sales to increase by 51% YoY to INR14b largely due to  Update on new approvals/launches and expansion plans in
addition of Cenexi and strong traction in core and ROW China.
markets.
 Update on the new biologics CDMO opportunities.  Progress on niche approvals for core markets.

Consol. - Quarterly perf.

Y/E March FY23 FY24E FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
Net Sales 8,569 10,444 9,383 7,850 12,087 13,734 14,178 14,608 36,246 54,608
YoY Change (%) -25.7 -3.3 -11.8 -28.8 41.1 31.5 51.1 86.1 -17.6 50.7
Total Expenditure 5,870 7,366 6,487 6,166 9,147 10,493 10,719 10,924 25,888 41,283
EBITDA 2,699 3,079 2,895 1,684 2,940 3,241 3,459 3,684 10,358 13,324
YoY Change (%) -38.1 -18.2 -17.0 -51.7 8.9 5.3 19.5 118.8 -31.4 28.6
Margins (%) 31.5 29.5 30.9 21.4 24.3 23.6 24.4 25.2 28.6 24.4
Depreciation 349 367 376 375 653 813 690 561 1,467 2,717
Interest 9 17 26 22 49 60 45 13 74 168
Other Income 744 656 615 389 375 532 385 237 2,405 1,529
PBT before EO expense 3,085 3,351 3,108 1,676 2,613 2,899 3,109 3,347 11,220 11,968
One-off income/(expense) 0 120 0 565 0 0 0 0 685 0
PBT 3,085 3,231 3,108 1,111 2,613 2,899 3,109 3,347 10,536 11,968
Tax 793 828 789 325 672 958 774 612 2,735 3,016
Rate (%) 25.7 25.6 25.4 29.2 25.7 33.0 24.9 18.3 26.0 25.2
Reported PAT 2,292 2,402 2,319 787 1,941 1,941 2,335 2,735 7,800 8,952
Adj PAT 2,292 2,511 2,319 1,186 1,941 1,941 2,335 2,735 8,307 8,952
YoY Change (%) -34.6 -16.9 -15.1 -58.5 -15.3 -22.7 0.7 130.6 -31.4 7.8

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 December 2023 Results Preview | Sector: Healthcare

Glenmark Pharma Neutral

CMP: INR855 | TP: INR800 (-7%) EPS CHANGE (%): FY24|25: (2.1)|(0.1)
 Expect DF sales to grow at 7% YoY led by cardiac and  Expect GNP US sales to decline by 7% YoY to USD95m partly
respiratory therapy. due to lack of approvals.
 Update on ramp-up of Winlevi in EU market and Ryaltris at  Watch out for remediation timeline to resolve USFDA issues
global level. and debt repayment.
Quarterly performance (INRm)
Y/E March FY23 FY24E FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
Net Revenues (Core) 27,773 30,179 34,639 33,737 30,361 32,074 32,390 33,855 1,14,890 1,28,679
YoY Change (%) -6.3 0.5 15.4 11.7 9.3 6.3 -6.5 0.3 -5.3 12.0
EBITDA 4,726 5,220 6,202 6,050 4,374 5,053 5,409 5,821 15,818 20,656
YoY Change (%) -17.6 0.0 18.8 20.5 -7.5 -3.2 -12.8 -3.8 -27.7 30.6
Margins (%) 17.0 17.3 17.9 17.9 14.4 15.8 16.7 17.2 13.8 16.1
Depreciation 1,468 1,458 1,623 1,465 1,420 1,415 1,420 905 5,692 5,160
EBIT 3,258 3,762 4,580 4,584 2,953 3,638 3,989 4,916 10,126 15,496
YoY Change (%) -29.2 -6.7 13.6 23.7 -9.4 -3.3 -12.9 7.2 -40.5 53.0
Margins (%) 11.7 12.5 13.2 13.6 9.7 11.3 12.3 14.5 8.8 12.0
Interest 600 829 973 1,093 1,116 1,215 1,140 703 3,490 4,174
Other Income 172 864 294 378 197 17 20 30 228 264
PBT before EO Expense 2,830 3,797 3,901 3,870 2,034 2,441 2,869 4,242 6,863 11,586
One-off loss/(gain) -1,250 430 -809 8,777 520 3,684 -1,230 0 4,465 2,974
PBT after EO Expense 4,080 3,367 4,710 -4,908 1,514 -1,244 4,099 4,243 2,398 8,612
Tax 1,969 1,648 1,802 -876 1,137 559 1,291 1,921 3,294 4,909
Rate (%) 48.3 49.0 38.3 17.9 75.1 -45.0 31.5 45.3 137.3 57.0
Reported PAT 2,111 1,719 2,908 -4,031 377 -1,803 2,808 2,321 -896 3,703
Minority Interest 186 182 182 252 232 204 0 0 802 436
Reported PAT after MI 1,925 1,536 2,726 -4,283 145 -2,007 2,808 2,321 -1,697 3,267
Adj PAT 1,682 2,324 2,227 2,302 1,111 1,397 1,965 2,321 3,728 6,794
YoY Change (%) -39.8 2.3 -1.9 19.7 -34.0 -39.9 -11.7 0.8 -61.8 82.2
Margins (%) 6.1 7.7 6.4 6.8 3.7 4.4 6.1 6.9 3.2 5.3
Adj. PAT from discontinued oper. 1,087 1,069 1,355 1,187 1,210 4,670 3,752
YoY Change (%)
Overall Adj. PAT 2,769 3,392 2227 2,302 2,465 2,584 3175 2,321 8398 10546
E: MOFSL Estimates Note: 2QFY23 and 1QFY24 are restated hence quarterly number will not match with full year

Global Health Buy

CMP: INR951 | TP: INR1,100 (16%) EPS CHANGE (%): FY24|25: (1.2)|(0.4)
 Expect occupancy to reduce to 62% QoQ from 65%,  Expect ARPOB to grow 9% YoY to INR63.5k for the quarter.
due to festivals and weak season.
 Progress on Noida/South Delhi/Indore projects  Impact of increase in competition in Lucknow market
Consolidated - Quarterly Earning (INRm)
Y/E March FY23 FY24E FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
Gross Sales 6,172 6,791 6,943 7,034 7,730 8,439 8,262 8,608 26,943 33,039
YoY Change (%) 27.1 17.6 19.1 35.2 25.2 24.3 19.0 22.4 14.0 14.0
Total Expenditure 4,843 5,211 5,316 5,375 5,887 6,255 6,188 6,515 20,746 24,846
EBITDA 1,329 1,580 1,627 1,659 1,843 2,185 2,074 2,092 6,197 8,194
YoY Change (%) 31.2 15.3 18.4 112.2 38.7 38.3 27.5 26.1 36.5 32.2
Margins (%) 21.5 23.3 23.4 23.6 23.8 25.9 25.1 24.3 23.0 24.8
Depreciation 366 385 414 409 468 485 432 335 1,575 1,720
Interest 185 182 207 205 179 201 140 87 779 607
Other Income 93 155 119 284 215 208 190 184 649 796
PBT 871 1,168 1,125 1,329 1,410 1,707 1,692 1,853 4,492 6,662
Tax 284 311 319 320 390 455 467 514 1,231 1,826
Rate (%) 32.6 26.6 28.4 24.1 27.7 26.6 27.6 27.8 27.4 27.4
Reported PAT 587 857 806 1,009 1,020 1,252 1,225 1,339 3,261 4,836
Adj PAT 587 857 806 1,011 1,020 1,252 1,225 1,339 3,261 4,836
YoY Change (%) 40.6 28.0 15.1 476.3 73.8 46.1 52.0 32.5 66.2 48.3
Margins (%) 9.5 12.6 11.6 14.4 13.2 14.8 14.8 15.6 12.1 14.6
E: MOFSL Estimates

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 December 2023 Results Preview | Sector: Healthcare

Granules Buy
CMP: INR355 | TP: INR475 (15%) EPS CHANGE (%): FY24|25: (6.4)|(6.3)
 Expect formulation segment to drive overall sales growth  Update on completion of phase-II of Genome Valley.
of 7% on YoY basis.
 Progress on backward integration of Paracetamol/  Progress on completion of DCDA pilot plant.
Metformin
Quarterly Performance (INR m)
Y/E March FY23 FY24E FY23 FY24E
(Consolidated) 1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
Net Sales 10,196 11,507 11,461 11,955 9,855 11,895 12,305 13,884 45,119 47,938
YoY Change (%) 20.0 29.5 17.0 16.1 -3.3 3.4 7.4 16.1 20.4 6.2
EBITDA 2,115 2,429 2,313 2,361 1,579 2,130 2,399 2,856 9,218 8,964
YoY Change (%) 5.0 60.7 47.8 22.5 -25.4 -12.3 3.7 21.0 30.8 -2.8
Margins (%) 20.7 21.1 20.2 19.8 16.0 17.9 19.5 20.6 20.4 18.7
Depreciation 434 441 484 487 492 525 530 538 1,845 2,086
EBIT 1,682 1,988 1,829 1,874 1,086 1,605 1,869 2,318 7,373 6,879
YoY Change (%) 3.8 78.6 56.0 22.9 -35.4 -19.3 2.2 23.7 35.0 -6.7
Margins (%) 16.5 17.3 16.0 15.7 11.0 13.5 15.2 16.7 16.3 14.3
Interest 69 132 170 188 225 260 200 133 559 817
Other Income 47 48 9 34 3 15 35 42 138 96
PBT before EO expense 1,659 1,904 1,669 1,720 865 1,360 1,704 2,228 6,952 6,158
Extra-Ord expense 0 0 0 80 211 0 0 0 80 211
PBT 1,659 1,904 1,669 1,640 654 1,360 1,704 2,228 6,872 5,947
Tax 383 453 426 444 176 339 409 459 1,706 1,406
Rate (%) 23.1 23.8 25.5 27.1 26.9 24.9 24.0 20.6 24.8 23.6
Reported PAT 1,276 1,451 1,243 1,196 479 1,021 1,295 1,769 5,166 4,541
Adjusted PAT 1,276 1,451 1,243 1,254 633 1,021 1,295 2,084 5,224 5,033
YoY Change (%) 6.1 79.8 41.3 13.0 -50.4 -29.6 4.2 66.1 30.6 -3.7
Margins (%) 12.5 12.6 10.8 10.5 6.4 8.6 10.5 15.0 11.6 10.5

Ipca Laboratories Neutral

CMP: INR1,119| TP: INR1,080 (-3%) EPS CHANGE (%): FY24|25: 4.4|10.4
 Expect formulations segment/Unichem to drive overall Expect DF segment to grow 11% YoY led by Pain management.
sales growth of 37% YoY for the quarter.
 Expect API sales growth to be flat sequentially for the  Update on exports, business performance after Unichem
quarter, due to weak pricing acquisition.
Quarterly Performance (INRm)
Y/E March FY23 FY24E FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
Net Revenues (Core) 15,857 16,010 15,460 15,116 15,876 20,340 21,209 21,251 62,569 78,675
YoY Change (%) 1.3 3.7 8.1 17.3 0.1 27.0 37.2 40.6 7.3 25.7
EBITDA 2,835 2,722 2,319 1,810 2,941 3,606 3,351 3,084 9,812 12,981
YoY Change (%) -31.9 -29.3 -24.7 -25.0 3.8 32.4 44.5 70.4 -27.4 32.3
Margins (%) 17.9 17.0 15.0 12.0 18.5 17.7 15.8 14.5 15.7 16.5
Depreciation 617 637 666 695 693 903 915 919 2,616 3,430
EBIT 2,218 2,085 1,654 1,115 2,249 2,702 2,436 2,165 7,197 9,551
YoY Change (%) -38.5 -36.5 -33.6 -38.2 1.4 29.6 47.3 94.2 -35.7 32.7
Margins (%) 14.0 13.0 10.7 7.4 14.2 13.3 11.5 10.2 11.5 12.1
Interest 69 93 108 185 314 441 430 407 455 1,592
Other Income 221 362 309 259 449 386 350 286 1,151 1,470
PBT before EO Expense 2,369 2,354 1,854 1,189 2,383 2,647 2,356 2,043 7,892 9,429
One-off (gain)/ Expense 142 116 161 -105 -135 393 0 0 314 258
PBT after EO Expense 2,227 2,238 1,693 1,294 2,518 2,254 2,356 2,043 7,579 9,171
Tax 743 770 537 482 856 879 754 622 2,532 3,112
Rate (%) 31.3 32.7 29.0 40.5 35.9 33.2 32.0 30.5 32.1 33.0
Reported PAT 1,484 1,468 1,156 812 1,662 1,374 1,602 1,421 5,044 6,059
Minority Interest -54 -29 -78 -46 -34 76 -40 -112 -206 -110
Adj PAT after Minority Int 1,525 1,861 1,188 701 1,539 1,690 1,562 1,419 5,275 6,210
YoY Change (%) -50.3 -31.0 -37.2 -52.8 0.9 -9.2 31.5 102.5 -42.8 17.7
Margins (%) 9.6 11.6 7.7 4.6 9.7 8.3 7.4 6.7 8.4 7.9

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 December 2023 Results Preview | Sector: Healthcare

Laurus Labs Buy

CMP: INR433 | TP: INR500 (+15%) EPS CHANGE (%): FY24|25: 0 | 0
 Expect CS business to decline by 42% YoY led by lower  Progress on product addition in Non-ARV segment.
business from certain purchase orders.
 Expect ARV sales to grow 10% YoY/QoQ  Update on new order wins in ARV and CS segments.
Consolidated- Quarterly Earning Model (INRm)
Y/E March FY23 FY24E FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
Net Sales 15,389 15,759 15,448 13,809 11,818 12,245 14,170 17,455 60,406 55,687
YoY Change (%) 20.4 30.9 50.2 -3.1 -23.2 -22.3 -8.3 26.4 22.4 -7.8
EBITDA 4,542 4,489 4,036 2,855 1,667 1,879 3,273 5,209 15,923 12,028
YoY Change (%) 14.9 30.1 41.5 -28.0 -63.3 -58.1 -18.9 82.5 11.9 -24.5
Margins (%) 29.5 28.5 26.1 20.7 14.1 15.3 23.1 29.8 26.4 21.6
Depreciation 708 818 844 870 906 934 940 995 3,241 3,774
EBIT 3,834 3,671 3,191 1,985 762 945 2,333 4,214 12,682 8,254
YoY Change (%) 13.8 30.2 44.2 -40.0 -80.1 -74.3 -26.9 112.3 8.3 -34.9
Margins (%) 24.9 23.3 20.7 14.4 6.4 7.7 16.5 24.1 21.0 14.8
Interest 293 401 427 531 392 424 420 550 1,652 1,786
Other Income 18 11 14 17 36 18 41 56 60 150
PBT before EO expense 3,559 3,281 2,779 1,471 406 539 1,954 3,720 11,090 6,619
Extra-Ord expense 0 0 0 0 0 0 0 0 0 0
PBT 3,559 3,281 2,779 1,471 406 539 1,954 3,720 11,090 6,619
Tax 1,033 943 748 399 122 146 492 897 3,125 1,657
Rate (%) 29.0 28.7 26.9 27.1 30.0 27.0 25.2 24.1 28.2 25.0
Reported PAT 2,525 2,338 2,031 1,052 268 370 1,462 2,823 7,965 4,922
Adj PAT 2,525 2,338 2,031 1,052 268 370 1,462 2,823 7,965 4,922
YoY Change (%) 4.5 14.6 31.0 -54.6 -89.4 -84.2 -28.0 168.4 -4.3 -38.2
Margins (%) 16.4 14.8 13.1 7.6 2.3 3.0 10.3 16.2 13.2 8.8
E: MOFSL Estimates

Lupin Sell
CMP: INR1,313 | TP: INR1,070 (-19%) EPS CHANGE (%): FY24|25: 3.7|4.4
 Expect US sales to decline 4% YoY to USD205m.  EU sales to witness robust growth of 37% YoY led by new
launches
 DF segment to decline 3% QoQ for the quarter.  Update on niche approvals beyond g-Spiriva.
Quarterly Performance (Consolidated) (INRm)
Y/E March FY23 FY24E FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
Net Sales 37,438 41,455 43,222 44,301 46,087 50,385 48,384 48,768 166,417 193,624
YoY Change (%) -3.9 1.3 3.9 14.1 23.1 21.5 11.9 10.1 3.8 16.3
Total Expenditure 35,799 37,114 37,662 38,260 39,574 41,153 39,917 39,870 148,835 160,514
EBITDA 1,639 4,342 5,560 6,041 6,513 9,232 8,467 8,898 17,582 33,110
YoY Change (%) -70.4 -27.2 -1.4 114.0 297.3 112.6 52.3 47.3 -11.9 88.3
Margins (%) 4.4 10.5 12.9 13.6 14.1 18.3 17.5 18.2 10.6 17.1
Depreciation 1,928 2,035 2,204 2,640 2,347 2,479 2,550 2,421 8,807 9,796
EBIT -289 2,307 3,356 3,401 4,166 6,754 5,917 6,477 8,775 23,313
YoY Change (%) -108.4 -40.0 -6.9 304.1 LP 192.7 76.3 90.5 -25.3 165.7
Margins (%) -0.8 5.6 7.8 7.7 9.0 13.4 12.2 13.3 5.3 12.0
Interest 428 549 841 926 856 806 810 791 2,743 3,263
Other Income 56 149 180 373 228 404 350 268 757 1,250
EO Exp/(Inc) -684 -188 234 263 -2,053 54 0 0 -375 -1,999
PBT 23 2,096 2,461 2,585 5,591 6,298 5,457 5,954 7,165 23,300
Tax 891 751 885 161 1,055 1,344 1,255 1,565 2,688 5,219
Rate (%) 3,907.5 35.8 36.0 6.2 18.9 21.3 23.0 26.3 37.5 22.4
Minority Interest -23 -47 -42 -64 -11 -57 -21 -8 -176 -96
Reported PAT -891 1,297 1,535 2,360 4,525 4,898 4,181 4,381 4,301 17,985
Adj PAT -1,552 1,177 1,684 2,606 2,855 4,940 4,181 4,381 3,915 16,357
YoY Change (%) -164.0 -61.5 -37.5 399.9 LP 319.9 148.3 68.1 -55.0 317.8
Margins (%) -4.1 2.8 3.9 5.9 6.2 9.8 8.6 9.0 2.4 8.4
E: MOFSL estimates

January 2024 163

 December 2023 Results Preview | Sector: Healthcare

Max Healthcare Buy

CMP: INR688 | TP: INR790 (15%) EPS CHANGE (%): FY24|25: 0|2.9
 Expect ARPOB to be stable QoQ to INR74k.  Progress on optimizing payor mix/case mix and scope of
improving profitability.
 Expect overall sales to grow 14% YoY for the quarter  Update on VRS for employees at Nanavati hospitals
Consolidated - Quarterly Earning (INRm)
Y/E March FY23 FY24E FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
Gross Sales 13,903 14,717 14,640 15,490 16,220 17,190 16,690 18,660 58,750 68,759
YoY Change (%) 5.5 9.6 13.5 26.9 16.7 16.8 14.0 20.5 13.6 17.0
Total Expenditure 10,228 10,712 10,590 11,150 11,930 12,350 12,100 13,471 42,680 49,851
EBITDA 3,675 4,005 4,050 4,340 4,290 4,840 4,590 5,189 16,070 18,909
Margins (%) 26.4 27.2 27.7 28.0 26.4 28.2 27.5 27.8 27.4 27.5
Depreciation 650 630 630 690 640 660 668 778 2,600 2,746
Interest 200 140 70 -20 -30 -170 -55 80 390 -175
Other Income 30 100 130 30 70 130 140 141 290 481
PBT before EO expense 2,855 3,335 3,480 3,700 3,750 4,480 4,117 4,472 13,370 16,819
Extra-Ord expense 110 120 180 -20 190 190 0 0 390 380
PBT 2,745 3,215 3,300 3,720 3,560 4,290 4,117 4,472 12,980 16,439
Tax 456 -1,896 610 530 660 910 576 648 -300 2,795
Rate (%) 16.6 -59.0 18.5 14.2 18.5 21.2 14.0 14.5 -2.3 17.0
Reported PAT 2,289 5,111 2,690 3,190 2,900 3,380 3,541 3,824 13,280 13,644
Adj PAT 2,381 2,835 2,837 3,173 3,055 3,530 3,541 3,824 11,226 13,949
YoY Change (%) 15.6 31.6 12.2 53.5 28.3 24.5 24.8 20.5 27.5 24.3
Margins (%) 17.1 19.3 19.4 20.5 18.8 20.5 21.2 20.5 19.1 20.3
E: MOFSL Estimates

Piramal Pharma Buy

CMP: INR139 | TP: INR160 (15%) EPS CHANGE (%): FY24|25: 0 | 0
 Expect sales to grow by 17% YoY to INR20b.  Higher operating leverage to drive EBITDA margin expansion.
 Progress on CDMO segment order book  Update on market expansion/ customer addition of CHG segment.

Consolidated - Quarterly Earning INR m

PPL Income statement FY23 FY24E FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
Revenues 14,820 17,200 17,160 21,636 17,489 19,114 20,043 22,584 70,816 79,229
growth YoY(%) 13.0 9.0 11.5 1.5 18.0 11.1 16.8 4.4 8.0 11.9
Expenses 13,969 15,475 15,962 18,123 16,165 16,457 16,976 18,150 63,529 67,749
CDMO 7,700 9,400 10,210 12,850 8,980 10,680 11,435 13,482 40,160 44,578
CHG 5,080 5,620 5,140 7,020 6,170 5,890 6,168 7,147 22,860 25,375
ICP 2,110 2,270 2,140 2,060 2,390 2,560 2,440 1,888 8,590 9,277
EBITDA* 851 1,726 1,197 3,513 1,323 2,656 3,067 4,434 7,286 11,481
margin (%) 5.7 10.0 7.0 16.2 7.6 13.9 15.3 19.6 10.3 14.5
growth YoY(%) -34.3 -12.2 -46.9 -11.7 55.5 53.9 156.1 26.2 -23.3 57.6
Depreciation 1,617 1,662 1,644 1,844 1,736 1,845 1,760 1,629 6,767 6,970
EBIT -766 64 -447 1,669 -413 811 1,307 2,806 520 4,511
Other income 719 462 825 245 383 492 510 515 2,251 1,900
Interest expense 623 830 947 1,043 1,185 1,099 890 911 3,442 4,085
Share from Asso. Co 199 111 156 78 144 191 140 90 543 565
PBT -471 -193 -412 949 -1,071 396 1,067 2,500 -128 2,891
EO Expenses/(gain) 680 70 324 - - - - - 1,074 -
Taxes -61 111 165 448 -85 345 245 507 663 1,012
Tax Rate (%) 5.3 -42.2 -22.5 47.2 8.0 87.3 23.0 20.3 -55.2 35.0
Reported PAT -1,091 -373 -902 501 -986 50 821 1,994 -1,865 1,879
Adj. PAT -446 -274 -578 501 -986 50 821 1,994 -798 1,879
Change (%) NA NA NA -75.4 NA LP LP 297.8 NA NA
E: MOFSL Estimates

January 2024 164

 December 2023 Results Preview | Sector: Healthcare

Sun Pharma Buy

CMP: INR1,260 | TP: INR1,450 (+15%) EPS CHANGE (%): FY24|25: 0.1 | (2.2)
 US sales expected to grow by 9% YoY to USD458m on the back  Expect DF sales to grow 8% YoY for the quarter.
of steady traction in specialty portfolio.
 Update on potential launch pipeline over next 12-15 months.  Outlook on R&D spend for FY24/FY25, based on the
projects undergoing different phases of clinical trials.
Quarterly Performance (Consolidated) (INR b)
Y/E March FY23 FY24E FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2QE 3QE 4QE
Net Revenues 106.4 108.1 110.0 106.7 117.9 120.0 122.7 124.0 431.2 484.5
YoY Change (%) 10.1 14.0 12.1 13.7 10.7 11.0 11.6 16.2 12.4 12.4
Total Expenditure 80.2 77.5 82.3 81.0 86.1 89.8 91.2 94.2 321.1 361.2
EBITDA 26.2 30.5 27.6 25.7 31.7 30.2 31.5 29.8 110.1 123.3
YoY Change (%) -2.6 19.2 7.6 21.2 21.1 -1.0 14.1 16.0 10.7 12.0
Margins (%) 24.6 28.3 25.1 24.1 26.9 25.2 25.7 24.0 25.5 25.4
Depreciation 5.9 6.1 6.6 6.7 6.5 6.3 6.5 6.5 25.3 25.8
EBIT 20.3 24.5 21.0 19.0 25.2 23.9 25.1 23.3 84.8 97.5
YoY Change (%) -7.1 20.3 4.4 21.4 24.1 -2.2 19.2 22.9 8.7 15.0
Interest 0.1 0.2 0.5 0.9 0.8 0.5 0.8 1.2 1.7 3.3
Net Other Income 1.2 2.3 3.1 5.8 3.6 4.8 4.1 3.7 12.4 16.2
PBT before EO Exp 21.4 26.5 23.7 23.8 28.0 28.2 28.3 25.8 95.5 110.4
Less: EO Exp/(Inc) -1.5 2.4 -1.0 1.4 3.2 0.3 0.0 0.1 1.4 3.6
PBT 22.8 24.1 24.7 22.4 24.8 27.9 28.3 25.8 94.1 106.8
Tax 1.9 1.5 2.8 2.2 4.7 3.9 3.1 2.7 8.5 14.4
Rate (%) 8.8 5.7 11.9 9.4 16.7 13.8 11.0 10.3 8.9 13.0
PAT (pre Minority Interest) 21.0 22.6 21.9 20.2 20.1 24.0 25.2 23.1 85.6 92.5
Minority Interest 0.3 0.0 0.2 0.3 -0.1 0.3 0.2 0.0 -0.9 0.4
Reported PAT 20.6 22.6 21.7 19.8 20.2 23.8 25.0 23.1 84.7 92.1
Adj Net Profit* 19.3 24.9 20.8 21.1 22.8 24.0 25.0 23.1 86.1 95.0
YoY Change (%) -3.4 21.5 9.3 33.6 18.5 -3.4 20.5 9.3 14.4 10.4
Margins (%) 18.1 23.0 18.9 19.8 19.4 20.0 20.4 18.6 19.7 19.0

Torrent Pharmaceuticals Neutral

CMP: INR2,296 | TP: INR2,160 (-6%) EPS CHANGE (%): FY24|25: (4.4)|0.1
 Expect US sales to grow 6%% YoY/12% QoQ at USD38m due DF sales to remain flat QoQ at INR14b.
to clearance at Dahej site.
 Progress on OTC portfolio expansion and further  Update on new launches in Germany and Brazil.
investment to aid growth
Quarterly performance (Consolidated) (INR b)
Y/E March FY23 FY24E FY23 FY24E
INRb 1Q 2Q 3Q 4Q 1Q 2QE 3QE 4QE
Net Revenues 23.1 22.9 24.9 24.9 25.9 26.6 27.4 28.4 95.8 108.4
YoY Change (%) 8.2 7.2 18.2 17.0 12.2 16.1 10.0 14.2 12.6 13.1
EBITDA 6.7 6.8 7.4 7.4 7.9 8.3 8.7 9.4 28.3 34.3
YoY Change (%) -0.4 2.9 37.3 32.6 17.4 21.5 18.3 28.2 16.4 21.4
Margins (%) 29.2 29.6 29.7 29.6 30.5 31.0 31.9 33.2 29.5 31.7
Depreciation 1.6 1.6 1.9 2.0 1.9 2.0 2.1 2.1 7.1 8.1
EBIT 5.2 5.2 5.5 5.4 6.0 6.2 6.7 7.4 21.2 26.3
YoY Change (%) 1.4 4.9 47.1 37.3 15.6 20.9 22.6 36.1 19.9 23.9
Margins (%) 22.5 22.5 21.9 21.7 23.2 23.5 24.4 25.9 22.1 24.3
Interest 0.6 0.7 1.0 1.1 1.0 0.9 0.9 0.9 3.3 3.8
Other Income 0.3 0.2 0.3 0.1 0.3 0.3 0.4 0.4 0.9 1.4
PBT before EO Expense 4.9 4.6 4.7 4.4 5.3 5.6 6.1 6.9 18.7 23.9
One-off expenses -0.4 0.0 0.5 0.1 0.0 0.0 0.0 0.0 0.3 0.0
PBT after EO Expense 5.3 4.6 4.2 4.3 5.3 5.6 6.1 6.9 18.5 23.9
Tax 1.8 1.5 1.4 1.5 1.5 1.7 1.7 1.9 6.1 6.9
Rate (%) 36.0 32.6 28.7 33.0 28.8 30.9 28.0 28.4 32.6 29.0
Reported PAT 3.5 3.1 2.8 2.9 3.8 3.9 4.4 4.9 12.4 17.0
Adj PAT 3.3 3.1 3.2 3.0 3.8 3.9 4.4 4.9 12.6 17.0
YoY Change (%) -0.4 -1.3 28.5 11.5 15.0 23.7 37.7 64.9 8.3 34.7
Margins (%) 14.2 13.6 12.8 11.9 14.6 14.5 16.1 17.2 13.1 15.6

January 2024 165

 December 2023 Results Preview | Sector: Healthcare

Zydus Lifesciences Neutral

CMP: INR698 | TP: INR710 (2%) EPS CHANGE (%): FY24|25: 0|4.7
 US sales expected to be flat YoY due to price erosion and  Expect DF sales to grow by 5% YoY for the quarter due to
slower offtake of niche products. moderate growth in key therapies.
 Update on launching limited competition products in US  Update on the progress of development of NCE pipeline.
market.
Quarterly Performance (Consolidated)
Y/E March FY23 FY24E FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
Net Revenues 39.6 40.1 42.6 50.1 51.4 43.7 44.0 53.8 172.4 192.8
YoY Change (%) -0.9 5.8 17.0 29.7 29.6 9.1 3.3 7.3 12.9 11.9
Total Expenditure 32.4 32.0 33.6 37.0 36.1 33.0 33.6 40.7 135.0 143.5
EBITDA 7.2 8.0 9.0 13.1 15.3 10.6 10.4 13.0 37.4 49.4
YoY Change (%) -25.4 -6.8 19.7 52.6 111.5 32.6 15.1 -0.7 6.1 32.0
Margins (%) 18.3 20.0 21.1 26.2 29.8 24.4 23.5 24.3 21.7 25.6
Depreciation 1.8 1.8 1.8 1.8 1.8 1.8 1.9 2.0 7.2 7.6
EBIT 5.4 6.2 7.2 11.4 13.5 8.8 8.5 11.0 30.2 41.8
YoY Change (%) -31.9 -8.2 24.9 68.0 148.6 41.8 17.8 -2.9 7.4 38.5
Margins (%) 13.7 15.5 16.9 22.7 26.3 20.1 19.2 20.5 17.5 21.7
Interest 0.3 0.4 0.3 0.3 0.2 0.1 0.1 0.1 1.3 0.5
Other Income 0.7 0.4 0.4 0.4 0.4 0.5 0.5 0.4 1.9 1.8
PBT before EO Income 5.8 6.3 7.2 11.5 13.7 9.3 8.8 11.3 30.7 43.1
EO Exp/(Inc) -1.1 -0.1 -0.6 6.6 0.4 -0.8 0.0 0.0 4.8 -0.4
PBT after EO Income 6.8 6.4 7.8 4.9 13.3 10.1 8.8 11.3 25.9 43.5
Tax 1.2 1.4 2.0 1.4 2.2 2.3 2.2 3.0 5.9 9.6
Rate (%) 17.4 21.3 25.0 28.2 16.3 22.5 24.5 26.4 22.7 22.0
Min. Int/Adj on Consol -0.4 0.1 0.4 -0.5 -0.3 0.2 -0.1 -0.2 -0.4 -0.3
Reported PAT 5.3 5.2 6.2 3.0 10.9 8.0 6.6 8.1 19.6 33.7
Adj PAT 4.4 5.1 5.8 7.7 11.2 7.4 6.6 8.1 22.9 33.4
YoY Change (%) -26.4 -13.6 14.4 46.1 155.4 45.7 14.1 5.4 3.9 45.4
Margins (%) 11.1 12.6 13.6 15.4 21.8 16.9 15.1 15.1 13.3 17.3
E: MOFSL Estimates

January 2024 166


Company
G R Infraprojects
IRB Infrastructure Developers
KNR Constructions
Alok Deora – Research Analyst (Alok.Deora@MotilalOswal.com)
Saurabh Dugar – Research Analyst (Saurabh.Dugar@MotilalOswal.com)
December 2023 Results Preview | Sector: Infrastructure
Infrastructure
Order book healthy; execution to improve marginally
Project awarding remains muted in 3QFY24
 Project awarding by NHAI stood at 310km and construction stood at 2,370km in
FY24YTD. The muted awarding by NHAI has hit FY24 order inflows for several
road construction companies, and accordingly, some companies have reduced
their order inflow targets for FY24.
 Road construction activities gained momentum in Oct’23, with NHAI completing
~350km of roads vs. ~150km in Sep’23 and ~340km in Oct’22. During Apr-Dec’23,
road construction has reached 2,370km.
 Construction activity has picked up pace since Oct’23 after the extended
monsoon season ended, though it remains muted on YoY basis. Construction
activity is expected to pick up in 4QFY24, as many projects won in the last few
quarters would start contributing to revenues.
 Higher budgetary outlay for roads in the Union Budget (+25% YoY in FY24)
should support project awarding ahead. However, due to the upcoming
elections, the pace of awarding could remain muted even in 4QFY24.
Commodity prices have softened, but high competition remains an issue. The
government’s thrust on infrastructure development and improved credit
availability from banks are notable encouraging factors.
FASTag toll collections continue to improve, asset monetization in focus
 FASTag toll collections (volume) improved ~13% YoY during 3QFY24, while
collections in value terms increased by ~19% YoY. Higher toll collections play a
crucial role in expediting the monetization of road assets by the government.
Additionally, it benefits companies seeking to monetize their existing toll assets.
 NHAI is primarily focusing on asset monetization to generate funds beyond
budgetary allocations. NHAI awarded two TOT bundles, 11 and 12, totaling
400km, at a cost of INR66b in Oct’23. Further, bids have been recently opened
for Bundles 13 and 14 in Dec’23. For FY24, NHAI aims to achieve a total
monetization target of up to INR450b.
Execution to be soft for our coverage universe YoY
 For our coverage universe, we expect revenue to increase by 9% YoY and 8% QoQ.
 We expect operating profit for our coverage universe to increase 8% YoY as
margins are expected to be soft amid muted execution due to the extended
monsoon season and the festive season during the quarter.
 Due to a lower tax rate and reduction in losses in associate companies for IRB,
aggregate net profit for our coverage universe is expected to increase by 15% YoY
and 41% QoQ during 3QFY24.
 December 2023 Results Preview | Sector: Infrastructure

Softening input prices to support margins for contractors

 Steel prices have decreased ~25%, while aluminum prices have dropped ~32%
since Apr’22. Conversely, cement prices have increased ~9% from their lows
seen in Jul’22.
 With increased construction activities and stability in commodity prices, road
contractors anticipate some improvement in profitability and margins in
2HFY24.

Players with strong order book, robust balance sheet and diversified
operations are well placed
 Despite sluggishness in project awarding in FY24, there is a robust pipeline of
tenders. Entities boasting substantial order backlogs, strong financial standings,
and presence in various sectors are well positioned to capitalize on NHAI's
proactive approach to project allocation in FY24.
 Players with decent order books, strong balance sheets, and presence in two or
more segments are better placed to capitalize on the opportunity.
 KNRC is our top pick in the sector given its favorable net cash balance sheet,
which is attributed to the following factors: a) the successful monetization of
HAM projects, b) a solid order book, c) impressive execution abilities, and d) a
strong margin profile.

Exhibit 1: Summary of expected quarterly performance

Sales (INR m) EBITDA (INR m) Adjusted profit (INR m)
CMP
Company Variance Variance Variance Variance Variance Variance
(INR) Rating Dec'23 Dec'23 Dec'23
% YoY % QoQ YoY % QoQ % YoY % QoQ
G R Infraproject 1132 Buy 18,783 -1.1 19.3 2,667 -3.7 37.7 1,729 -0.7 40.3
IRB Infra 42 Neutral 18,219 20.3 4.4 8,350 12.1 5.1 1,790 26.6 86.9
KNR Constructions 258 Buy 9,183 10.6 -2.5 1,644 5.3 -1.1 990 27.4 -0.9
Infrastructure 46,185 8.8 8.4 12,661 7.5 9.7 4,509 14.7 41.4

Exhibit 2: Trends in NHAI awarding and construction

Tenders awarded by NHAI (in km) Road construction by NHAI (in km) Awarding target for FY24
4,344
1,988

4,335
2,628

7,396
3,071

2,222
3,380

3,211
3,979

4,788
4,184

6,306
4,325

6,003
4,882

2,370
6000
310

FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24 (YTD)
Source: NHAI, MOFSL

January 2024 168

 December 2023 Results Preview | Sector: Infrastructure

Exhibit 3: FASTag toll collections

FASTag Toll Collections (INR b) Volume (In m)

348
308 301 306 335 316 308 320 321
288 305 295 299

52.0

49.8
49.4

48.1

46.8

50.7

51.5

54.3

51.8

50.9

55.4

53.0

58.6
Dec'22 Jan'23 Feb'23 Mar'23 Apr'23 May'23 Jun'23 July'23 Aug'23 Sep'23 Oct'23 Nov'23 Dec'23

Source: NPCI, MOFSL

Exhibit 4: Relative performance – three-months (%) Exhibit 5: Relative performance – one-year (%)
Nifty Index MOFSL Infrastructure Index Nifty Index MOFSL Infrastructure Index
115 140

110 120

105 100

100 80

95 60
Sep-23 Oct-23 Nov-23 Dec-23 Dec-22 Mar-23 Jun-23 Sep-23 Dec-23
Source: Bloomberg, MOFSL Source: Bloomberg, MOFSL

Exhibit 6: Comparative valuations

CMP EPS (INR) P/E (x) P/B (x) RoE (%)
Company (INR) Rating Reco FY24E FY25E FY26E FY24E FY25E FY26E FY24E FY25E FY26E FY24E FY25E
Infrastructure 23.0 18.9 16.5 1.9 1.7 1.6 8.2 9.2 9.6
G R Infraproject 1,132 Buy 74.8 85.4 98.6 15.1 13.3 11.5 1.8 1.6 1.4 13.0 13.0 13.2
IRB Infra 42 Neutral 1.2 1.6 1.8 35.1 26.5 22.8 1.8 1.7 1.6 5.3 6.7 7.4
KNR Constructions 258 Buy 15.8 18.4 20.4 16.3 14.0 12.6 2.3 2.0 1.7 15.1 15.1 14.6

January 2024 169

 December 2023 Results Preview | Sector: Infrastructure

The tables below provide a snapshot of actual and estimated numbers for companies under the MOFSL coverage
universe. Highlighted columns indicate the quarter/financial year under review.

G R Infraprojects Buy
CMP: INR1,132 | TP: INR1,390 (+23%) EPS CHANGE (%): FY24|25: -1|-5
 Revenue to remain flat YoY at INR18.8b in 3QFY24.  Expect EBITDA at ~INR2.7b and EBITDA margin at 14.2%.
Muted execution and elevated costs will continue to hurt
EBITDA margin.
 Adjusted PAT to decrease by ~1% YoY to INR1.7b;  Commentaries on order inflows and monetization of assets
Profitability to be affected by muted execution and low through the InvIT route are the key monitorables.
margins.
Standalone quarterly performance (INR m)
Y/E March FY23 FY24E
FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
Net Sales 24,767 17,772 18,988 19,949 21,524 15,738 18,783 22,217 81,476 78,262
YoY Change (%) 16.1 4.6 4.4 (12.0) (13.1) (11.4) (1.1) 11.4 2.9 (3.9)
EBITDA 4,864 2,600 2,769 2,898 3,147 1,937 2,667 3,283 13,131 11,035
Margin (%) 19.6 14.6 14.6 14.5 14.6 12.3 14.2 14.8 16.1 14.1
Depreciation 634 620 612 590 602 617 615 616 2,457 2,451
Interest 269 236 248 269 266 277 280 279 1,022 1,102
Other Income 320 519 421 549 511 614 540 544 1,809 2,209
PBT before EO expense 4,281 2,263 2,329 2,589 2,790 1,656 2,312 2,933 11,461 9,691
Extra-Ord. expense - - - - - - - - - -
PBT 4,281 2,263 2,329 2,589 2,790 1,656 2,312 2,933 11,461 9,691
Tax 1,069 620 588 667 710 423 583 739 2,943 2,455
Rate (%) 25.0 27.4 25.2 25.7 25.4 25.6 25.2 25.2 25.7 25.3
Reported PAT 3,211 1,643 1,742 1,922 2,080 1,233 1,729 2,194 8,518 7,236
Adj. PAT 3,211 1,643 1,742 1,922 2,080 1,233 1,729 2,194 8,518 7,236
YoY Change (%) 57.7 0.8 31.9 (27.5) (35.2) (25.0) (0.7) 14.1 11.5 (15.0)
Margin (%) 13.0 9.2 9.2 9.6 9.7 7.8 9.2 9.9 10.5 9.2

IRB Infrastructure Developers Neutral

CMP: INR42 | TP: INR41 (-3%) EPS CHANGE (%): FY24|25: -19|-7
 Expect ~27% YoY growth in construction revenue and ~8%  Expect operating margin at 45.8% (+30bp QoQ). IRB to be
YoY growth from BOT projects. cautious in bidding for projects due to aggressive bidding in
NHAI projects.
 Adjusted PAT to be INR1.8b (+27% YoY); higher construction  New order wins in the construction segment and progress on
revenue to reduce losses in associate and lower taxes to the Ganga Expressway project are key monitorables.
support PAT.
Quarterly performance (INR m)
Y/E March FY23 FY24E
FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
Net Sales 19,246 13,430 15,141 16,200 16,342 17,450 18,219 19,983 64,016 71,994
YoY Change (%) 18.4 (8.3) 18.4 13.0 (15.1) 29.9 20.3 23.4 10.3 12.5
Total Expenditure 8,639 6,778 7,695 8,612 8,564 9,504 9,869 10,715 31,725 38,652
EBITDA 10,606 6,651 7,446 7,588 7,778 7,946 8,350 9,268 32,291 33,343
Margins (%) 55.1 49.5 49.2 46.8 47.6 45.5 45.8 46.4 50.4 46.3
Depreciation 2,031 1,919 2,150 2,221 2,367 2,327 2,300 2,199 8,321 9,193
Interest 3,850 3,893 3,671 3,733 3,815 4,346 3,950 3,655 15,146 15,766
Other Income 708 959 560 789 1,112 1,295 1,100 1,151 3,016 4,658
PBT 5,434 1,799 2,185 2,423 2,709 2,569 3,200 4,564 11,840 13,042
Tax 1,468 702 646 753 836 858 960 1,372 3,569 4,026
Rate (%) 27.0 39.0 29.6 31.1 30.9 33.4 30.0 30.1 30.1 30.9
Share of profit in Associates (334) (244) (125) (367) (535) (753) (450) (81) (1,069) (1,819)
Reported PAT 3,632 854 1,414 1,303 1,338 958 1,790 3,111 7,202 7,196
Adj PAT 3,632 854 1,414 1,303 1,338 958 1,790 3,111 7,202 7,196
YoY Change (%) 405.1 101.7 94.5 (25.3) (63.2) 12.2 26.6 138.8 99.3 (0.1)
Margins (%) 18.9 6.4 9.3 8.0 8.2 5.5 9.8 15.6 11.3 10.0

January 2024 170

 December 2023 Results Preview | Sector: Infrastructure

KNR Constructions Buy

CMP: INR258 | TP: INR325 (+26%) EPS CHANGE (%): FY24|25: -2|+1
 Expect revenue of INR10b (+11% YoY).  Expect EBITDA at INR1.6b and operating margin to decrease
90bp YoY due to high operating costs.
 Expect adjusted PAT at INR1.0b (+27% YoY).  New order wins and updates on irrigation receivables are
key monitorables.
Standalone quarterly performance (INR m)
Y/E March FY23 FY24E
FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
Net Sales 8,906 8,474 8,302 11,756 9,296 9,415 9,183 12,031 37,438 39,924
YoY Change (%) 20.4 12.2 8.3 16.3 4.4 11.1 10.6 2.3 14.4 6.6
Total Expenditure 7,256 6,586 6,742 9,636 7,563 7,752 7,539 9,844 30,220 32,698
EBITDA 1,650 1,888 1,560 2,119 1,733 1,663 1,644 2,187 7,218 7,226
Margin (%) 18.5 22.3 18.8 18.0 18.6 17.7 17.9 18.2 19.3 18.1
Depreciation 327 366 381 401 283 311 320 318 1,474 1,232
Interest 69 84 160 80 50 58 60 72 393 240
Other Income 91 76 59 96 71 50 60 59 321 240
Extra-Ord. expense 0 0 1,380 0 0 0 0 0 1,380 0
PBT 1,345 1,514 1,079 1,735 1,470 1,344 1,324 1,856 5,672 5,993
Tax 336 438 840 449 367 346 334 466 2,062 1,513
Rate (%) 25.0 28.9 77.9 25.9 25.0 25.7 25.2 25.1 36.4 25.2
Reported PAT 1,008 1,076 1,619 1,286 1,103 999 990 1,390 4,989 4,481
Adj. PAT 1,008 1,076 777 1,286 1,103 999 990 1,390 4,148 4,481
YoY Change (%) 38.1 13.0 -2.1 14.0 9.4 -7.2 27.4 8.1 15.1 8.0
Margin (%) 11.3 12.7 9.4 10.9 11.9 10.6 10.8 11.6 11.1 11.2

January 2024 171


Company
Blue Dart Express
Container Corporation of India
Mahindra Logistics
Transport Corporation of India
TCI Express Ltd
Adani Ports & SEZ Ltd
VRL Logistics Ltd
Alok Deora – Research Analyst (Alok.Deora@MotilalOswal.com)
Saurabh Dugar – Research Analyst (Saurabh.Dugar@MotilalOswal.com)
December 2023 Results Preview | Sector: Logistics
Logistics
Logistics activity picks up as festive demand kicks in
Margins to inch up sequentially
Daily e-way bill generations rise; railway traffic/port volumes improve YoY
 Following stable activity in 1HFY24, logistics operations experienced a notable
demand surge with the onset of the festive season in Oct’23. Daily average e-way
bill generations increased ~19% YoY during Oct-Nov’23. Fleet utilization stood at
80-85%. Daily average FASTag toll collections rose ~19% YoY during 3QFY24.
 In Oct-Nov’23, traffic handled by the Indian Railways grew ~6% YoY to 257 MT.
 Container rail data also saw an uptick, particularly in EXIM, which was muted
during Apr-Jul’23.
 Port volumes grew 15% YoY to 141.4 MT during Oct-Nov’23. Volume growth was
aided by an increase in cargo handling capacity across the east and west coasts,
a drop in commodity prices, and a reduction in freight rates.
Freight rates stable amid high cost of operations and elevated Brent prices
 Due to consistently high operational expenses and increased retail fuel costs,
freight rates have remained steady. Fleet operators are facing rising costs from
diesel, truck expenses, and compliance like GST and e-way bills.
 With a slight increase in volumes and stable diesel prices, organized firms are
likely to witness marginal margin improvements sequentially.
Festive season demand and improvement in logistics activity to bolster
growth for organized players
 In 3QFY24, we expect our coverage universe, excluding APSEZ, to report sales
growth of 12% YoY (+4% QoQ), EBITDA growth of 15% YoY (+7% QoQ), and PAT
growth of 12% YoY (+3% QoQ).
 An increase in logistics activity in 3Q as seen in rising e-way bills and FASTag toll
collections, combined with higher auto volumes during the festive season,
should result in single-digit sequential growth for road transport companies.
 APSEZ reported 42% YoY growth in Nov’23 volumes. The YTD FY24 volume
numbers are up 21% YoY. For 3QFY24, we expect APSEZ to report cargo volume
of 103 MMT (+37% YoY). With a monthly volume run rate of ~35MMT, APSEZ is
well placed to surpass the high-end of its volume guidance of 390 MMT in FY24.
 We estimate VRL Logistics (VRLL) to report 13% YoY sales growth. The company
is likely to witness the benefits of branch expansions in untapped regions and
fleet additions by 4QFY24.
 Blue Dart Express (BDE) faced challenges like aircraft expansion costs, a slow
industry demand, and price differences between Brent and ATF. Yet, with the
integration of the new aircraft in 2QFY24 and festive demand in 3QFY24, we
expect volume to pick up 3QFY24.
Organized and integrated service providers likely to gain market share
 The industry trend is shifting toward integrated supply-chain services and
sophisticated solutions (such as inventory optimization and data analytics) from
standalone offerings like transportation/warehousing.
 The logistics sector remains robust, propelled by government-driven reforms,
changing industry preferences, and the rise of new business sectors such as e-
commerce and network services.
 December 2023 Results Preview | Sector: Logistics

Exhibit 1: Summary of expected quarterly performance

Sales (INR m) EBITDA (INR m) Net profit (INR m)
CMP
Company Variance Variance Variance Variance Variance Variance
(INR) Rating Dec’23 Dec’23 Dec’23
YoY QoQ YoY QoQ YoY QoQ
Blue Dart 7,332 Buy 14,039 5% 6% 1,481 -2% 14% 841 -3% 18%
CONCOR 861 Buy 23,716 19% 8% 5,526 30% 3% 3,585 21% 0%
Mahindra Logistics 392 Neutral 14,849 12% 9% 646 3% 21% -3 -118% -98%
Transport Corp. 831 Buy 10,394 8% 5% 1,094 -4% 9% 893 4% 3%
TCI Express 1,379 Buy 3,400 8% 6% 554 20% 10% 391 22% 10%
Adani Ports 1,048 Buy 68,620 43% 3% 40,486 34% 4% 21,172 36% -5%
VRL Logistics 763 Buy 7,733 13% 9% 1,083 5% 18% 335 -11% 72%
Logistics 1,42,752 25% 5% 50,870 30% 5% 27,214 30% -2%

Exhibit 2: E-way bill generations Exhibit 3: Movement in freight rates vs. diesel prices
(in m) Intrastate Interstate Total (Base of 100) Freight Index Diesel Index

90.9 84.4 88.2 86.1 87.9 93.4 92.0100.3 87.6 102

80.7 84.1 82.4 81.8
101
37.4 24.6
31.1 33.6 34.0
29.4 30.6 30.1 30.1 33.1 31.0 31.5 30.0 100

51.3 53.6 52.3 51.7 57.8 53.4 56.7 56.0 56.8 59.8 58.0 62.9 62.9 99

98

Jun'23
Jul'23

Oct'23
Apr'23
Jan'23
Feb'23

Sep'23
Dec-22

Dec-23
May'23

Nov'23
Mar'23

Aug'23
Apr'23

July'23

Oct'23
Dec'22

Jun'23
Jan'23

Feb'23

Sep'23
Nov'22

Nov'23
May'23

Aug'23
Mar'23

Source: GSTN, MOFSL Source: IFTRT, MOFSL

Exhibit 4: Relative performance – three-months (%) Exhibit 5: Relative performance – one-year (%)

Nifty Index MOFSL Logistics Index Nifty Index MOFSL Infrastructure Index
130
140

120
125

110 110

95 100

80 90
Sep-23 Oct-23 Nov-23 Dec-23 Sep-22 Dec-22 Mar-23 Jun-23 Sep-23

Source: Bloomberg, MOFSL Source: Bloomberg, MOFSL

Exhibit 6: Comparative valuations
CMP EPS (INR) P/E (x) P/B (x) RoE (%)
Company (INR) Rating FY24E FY25E FY26E FY24E FY25E FY26E FY24E FY25E FY26E FY24E FY25E FY26E
Blue Dart 7,332 Neutral 161.7 187.4 247.0 54.8 36.8 29.2 12.1 9.9 7.8 23.6 29.6 29.9
CONCOR 861 Buy 20.3 24.6 29.1 39.6 33.8 29.2 4.4 4.1 3.8 11.4 12.6 13.6
Mahindra Logistics 392 Neutral 4.5 11.8 19.0 NA 43.3 20.5 5.4 4.9 4.1 -4.0 11.9 21.9
Transport Corp. 831 Buy 41.4 46.5 56.5 17.9 14.8 12.6 3.2 2.6 2.2 18.9 19.1 18.8
TCI Express 1,379 Buy 36.5 43.8 51.5 35.2 29.8 25.8 7.4 6.1 5.1 22.9 22.5 21.6
Adani Ports 1,048 Buy 40.2 46.5 56.5 26.1 22.6 18.6 4.3 3.8 3.3 17.7 17.9 19.0
VRL Logistics 763 Buy 36.5 43.8 51.5 52.1 31.1 23.2 6.4 5.7 4.9 12.7 19.4 22.8

January 2024 173

 December 2023 Results Preview | Sector: Logistics

The tables below provide a snapshot of actual and estimated numbers for companies under the MOFSL coverage
universe. Highlighted columns indicate the quarter/financial year under review.

Adani Ports & SEZ Buy

CMP: INR1,048 | TP: INR1,340 (+28%) EPS CHANGE (%): FY24|25: -1|-3
 Expect revenue to increase by ~43% YoY to INR68.6b, driven  Expect EBITDA at INR40.5b; EBITDA margin to improve
by 37% YoY growth in volumes and 20% YoY growth in slightly by 60bp QoQ driven strong volume growth in
Logistics business. 3QFY24.
 Expect adjusted PAT at INR21.2b (+36% YoY).  Improvement in utilization at existing and recently acquired
ports and growth in logistics business remain key
monitorables.

Quarterly snapshot
Y/E March (INR m) FY23 FY24E
FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
Net Sales 50,581 52,108 47,862 57,969 62,476 66,464 68,620 70,574 2,08,519 2,68,134
YoY Change (%) 8.3 32.8 17.5 40.0 23.5 27.6 43.4 21.7 21.8 28.6
EBITDA 32,905 32,603 30,114 32,713 37,537 38,805 40,486 42,688 1,28,335 1,59,515
Margin (%) 65.1 62.6 62.9 56.4 60.1 58.4 59.0 60.5 61.5 59.5
Depreciation 8,404 8,543 8,836 8,449 9,496 9,745 9,800 9,979 34,232 39,019
Interest 6,512 6,345 5,448 7,631 7,061 7,153 7,203 7,333 25,936 28,750
Other Income 4,681 4,381 2,650 3,823 3,837 3,055 3,207 3,417 15,535 13,515
PBT before EO expense 22,669 22,096 18,479 20,457 24,816 24,962 26,690 28,793 83,701 1,05,261
Extra-Ord. expense 12,232 4,271 3,258 14,146 -844 213 0 0 33,907 -631
PBT 10,437 17,825 15,221 6,311 25,660 24,749 26,690 28,793 49,794 1,05,892
Tax -721 1,626 2,274 -2,215 3,714 7,591 5,818 6,174 964 23,296
Rate (%) -6.9 9.1 14.9 -35.1 14.5 30.7 21.8 21.4 1.9 22.0
MI & Asso. Cos 17 573 11 -253 799 -320 -300 -306 348 -127
Reported PAT 11,141 15,626 12,936 8,779 21,147 17,479 21,172 22,925 48,482 82,723
Adj. PAT 20,927 19,043 15,543 20,095 20,472 22,200 21,172 22,925 75,608 86,770
YoY Change (%) 25.6 41.8 -2.1 25.0 -2.2 16.6 36.2 14.1 23.0 14.8

Blue Dart Express Buy

CMP: INR7,332 | TP: INR8,300 (+13%)
 Expect revenue to increase ~5% YoY to INR14b in 3QFY24.
 Expect adjusted PAT to decline ~3% YoY to INR841m.
EPS CHANGE (%): FY24|25: -6|-10
 Expect EBITDA at INR1.5b. EBITDA margin to improve 70bp
QoQ with better capacity utilization of the two newly added
aircraft.
 Volume growth in the air and surface express segments and
movement in ATF prices are key monitorables.

Standalone quarterly snapshot

Y/E March (INR m) FY23 FY24E FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
Net Sales 12,933 13,253 13,371 12,166 12,376 13,245 14,039 15,026 51,722 54,686
YoY Change (%) 49.6 18.0 6.6 4.3 -4.3 -0.1 5.0 23.5 17.3 5.7
EBITDA 1,908 1,627 1,506 1,282 1,133 1,305 1,481 1,747 6,323 5,666
Margin (%) 14.7 12.3 11.3 10.5 9.2 9.9 10.6 11.6 12.2 10.4
YoY Change (%) 128.7 -18.0 -26.1 -41.2 -40.6 -19.8 -6.3 10.4 -10.2 -10.4
Depreciation 397 419 414 436 444 456 450 449 1,666 1,799
Interest 47 42 42 44 45 48 48 53 174 194
Other Income 102 121 139 143 157 151 140 133 505 581
PBT before EO expense 1,566 1,288 1,189 945 801 952 1,123 1,378 4,987 4,255
Extra-Ord. expense 0 0 0 0 0 0 0 0 0 0
PBT 1,566 1,288 1,189 945 801 952 1,123 1,378 4,987 4,255
Tax 394 368 320 241 204 240 282 347 1,323 1,073
Rate (%) 25.2 28.5 26.9 25.5 25.4 25.2 25.2 25.2 26.5 25.2
Reported PAT 1,172 920 869 703 598 713 841 1,030 3,664 3,182
Adj. PAT 1,172 920 869 703 598 713 841 1,030 3,664 3,182
YoY Change (%) 298.9 -26.6 -28.9 -48.1 -49.0 -22.5 -3.3 46.5 -11.1 -13.2
Margin (%) 9.1 6.9 6.5 5.8 4.8 5.4 6.0 6.9 7.1 5.8

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 December 2023 Results Preview | Sector: Logistics

Container Corp. of India (CONCOR) Buy

CMP: INR861 | TP: INR990 (+15%) EPS CHANGE (%): FY24|25: -|-
 Expect volumes to rise 11% YoY on a low base of 3QFY23.  EXIM/domestic volumes to grow 13%/30% YoY.
 EBITDA margin to improve 190bp YoY to 23.3% on higher  Growth in EXIM trade, progress on commissioning of the
volumes. DFC, and divestment of stake by the government are the key
 Adj PAT to increase to ~INR3.6b (+21% YoY) on higher monitorables.
volumes and lower LLF growth.
Standalone quarterly snapshot
Y/E March (INR m) FY23 FY24E FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
Net Sales 19,783 19,707 19,884 21,660 19,193 21,904 23,716 24,712 81,034 89,526
YoY Change (%) 9.4 8.0 3.6 6.0 -3.0 11.1 19.3 14.1 6.7 10.5
EBITDA 4,723 4,986 4,264 4,447 3,916 5,372 5,526 5,738 18,421 20,553
Margin (%) 23.9 25.3 21.4 20.5 20.4 24.5 23.3 23.2 22.7 23.0
YoY Change (%) 9.0 16.9 -6.4 7.7 -17.1 7.7 29.6 29.0 6.6 11.6
Depreciation 1,312 1,341 1,357 1,531 1,378 1,486 1,422 1,370 5,541 5,655
Interest 139 143 142 146 141 147 133 129 570 550
Other Income 629 520 1,136 955 815 1,025 823 628 3,240 3,290
PBT before EO expense 3,901 4,022 3,901 3,725 3,212 4,764 4,793 4,868 15,550 17,637
Extra-Ord. expense 0 0 0 13 0 0 0 0 13 0
PBT 3,901 4,022 3,901 3,713 3,212 4,764 4,793 4,868 15,537 17,637
Tax 988 994 936 928 771 1,187 1,208 1,226 3,847 4,392
Rate (%) 25.3 24.7 24.0 25.0 24.0 24.9 25.2 25.2 24.8 24.9
Reported PAT 2,913 3,028 2,965 2,785 2,441 3,577 3,585 3,643 11,691 13,246
Adj. PAT 2,913 3,028 2,965 2,785 2,441 3,577 3,585 3,643 11,703 13,246
YoY Change (%) 14.3 14.7 3.5 8.4 -16.2 18.1 20.9 30.8 10.2 13.2
Margin (%) 14.7 15.4 14.9 12.9 12.7 16.3 15.1 14.7 14.4 14.8

Mahindra Logistics Neutral

CMP: INR392 | TP: INR420 (+7%)
 Expect revenue to rise ~12% YoY to INR14.8b.
 Expect adj. loss of INR3m as loss-making Rivigo business
dents profitability.
EPS CHANGE (%): FY24|25: -130|-27
 Expect EBITDA at INR646m (+3% YoY) and margin
improvement of 50bp on QoQ basis
 Integration of businesses like Rivigo and outlook on MM’s
auto segment sales to be the key focus areas.

Quarterly snapshot
Y/E March (INR m) FY23 FY24E FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
Net Sales 11,999 13,263 13,296 12,725 12,932 13,648 14,849 15,675 51,283 57,104
YoY Change (%) 35.9 28.4 17.0 16.9 7.8 2.9 11.7 23.2 23.8 11.4
EBITDA 657 676 627 637 666 536 646 704 2,598 2,552
Margin (%) 5.5 5.1 4.7 5.0 5.2 3.9 4.4 4.5 5.1 4.5
YoY Change (%) 61.8 43.8 38.4 23.8 1.4 -20.7 3.0 10.5 41.0 -1.8
Depreciation 409 436 498 553 545 518 522 524 1,895 2,109
Interest 89 107 150 169 178 165 180 197 516 720
Other Income 31 34 56 38 62 66 50 44 159 222
PBT 190 167 36 -46 6 -82 -6 27 345 -55
Tax 53 47 19 -48 89 73 -2 7 71 167
Rate (%) 28.1 28.5 53.0 104.3 1,556.1 -89.2 25.2 25.7 20.6 -304.5
Minority Interest/Associates -1 3 -3 -10 -3 -5 2 11 -11 6
Reported PAT 135 122 14 -8.2 -85.5 -159 -3 31 263 -216
Adj. PAT 135 122 14 -8.2 -85.5 -159 -3 31 263 -216
YoY Change (%) 310.9 132.2 -21.5 -111.1 NA -230.7 -118.3 LP 49.7 -182.2
Margin (%) 1.1 0.9 0.1 -0.1 -0.7 -1.2 0.0 0.2 0.5 -0.4

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 December 2023 Results Preview | Sector: Logistics

Transport Corporation of India Buy

CMP: INR831 | TP: INR990 (+19%)
 Expect revenue to rise ~8% YoY to INR10.4b, led by 21% YoY
growth in supply chain segment.
 Expect adjusted PAT at INR893m (+4% YoY) in 3QFY24.
EPS CHANGE (%): FY24|25: -1|-3
 Expect EBITDA at INR1.1b (-4.4% YoY) and EBITDA margins at
10.5% (-130bp YoY) due to weakness in prices in seaways
business.
 Volume growth in the freight business and margin in the
seaways business are the key monitorables.

Quarterly snapshot
Y/E March (INR m) FY23 FY24E FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
Net Sales 9,029 9,321 9,667 9,793 9,498 9,935 10,394 11,061 37,826 40,888
YoY Change (%) 29.7 13.0 15.4 9.0 5.2 6.6 7.5 12.9 16.1 8.1
EBITDA 1,041 960 1,144 1,081 1,008 1,004 1,094 1,190 4,240 4,296
Margin (%) 11.5 10.3 11.8 11.0 10.6 10.1 10.5 10.8 11.2 10.5
YoY Change (%) 37.4 -8.2 4.8 -10.0 -3.1 4.6 -4.4 10.1 3.2 1.3
Depreciation 289 300 314 311 308 311 312 297 1,214 1,228
Interest 23 25 26 24 23 34 25 21 98 103
Other Income 53 74 70 121 85 113 84 81 303 363
PBT before EO expense 782 708 874 867 762 772 841 953 3,231 3,328
Extra-Ord. expense 0 0 0 34 0 0 0 0 34 0
PBT 782 708 874 833 762 772 841 953 3,197 3,328
Tax 93 115 110 115 104 96 109 123 434 433
Rate (%) 11.9 16.2 12.6 13.8 13.6 12.4 13.0 12.9 13.6 13.0
Minority Interest -8.4 -6.6 -8.2 -9.3 -9.0 -8.0 -8.2 -4.8 -32.5 -30.0
Profit/Loss of Asso. Cos 98 138 102 106 174 202 170 178 444 724
Reported PAT 777 724 857 815 823 870 893 1,003 3,173 3,589
Adj. PAT 777 724 857 849 823 870 893 1,003 3,207 3,589
YoY Change (%) 65.9 -3.9 4.4 -1.2 5.9 20.3 4.2 18.2 10.7 11.9
Margin (%) 8.6 7.8 8.9 8.7 8.7 8.8 8.6 9.1 8.5 8.8

TCI Express Buy

CMP: INR1,379 | TP: INR1,600 (+16%) EPS CHANGE (%): FY24|25: -|-5
 Expect revenue to increase by 8% YoY to INR3.4b.  Expect EBITDA at INR554m; margin to increase 160bp YoY
driven by volume growth.
 Adjusted PAT to increase to INR391m (+22% YoY)  Outlook on B2B express segment and competitive scenario
to be the key monitorables

Quarterly performance
Y/E March (INR m) FY23 FY24E FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
Net Sales 2,904 3,099 3,144 3,263 3,049 3,200 3,400 3,640 12,410 13,289
YoY Change (%) 30.3 13.3 9.6 9.4 5.0 3.3 8.1 11.6 14.8 7.1
EBITDA 428 515 461 541 464 505 554 599 1,945 2,122
Margin (%) 14.7 16.6 14.7 16.6 15.2 15.8 16.3 16.5 15.7 16.0
YoY Change (%) 33.4 13.7 -2.3 7.8 8.4 -2.0 20.3 10.7 11.3 9.1
Depreciation 33 35 43 42 46 47 48 43 153 184
Interest 3 4 4 7 4 4 5 6 18 18
Other Income 19 23 13 17 15 18 21 24 72 77
PBT before EO expense 411 499 427 509 429 472 522 574 1,845 1,997
Extra-Ord. expense 0 0 0 0 0 0 0 0 0 0
PBT 411 499 427 509 429 472 522 574 1,845 1,997
Tax 101 121 106 124 105 116 132 145 453 498
Rate (%) 24.5 24.3 24.9 24.4 24.6 24.5 25.2 25.2 24.5 24.9
Reported PAT 310 378 320 385 323 356 391 429 1,393 1,499
Adj. PAT 310 378 320 385 323 356 391 429 1,393 1,499
YoY Change (%) 30.5 11.0 -8.8 7.0 4.3 -5.8 22.0 11.7 8.1 7.6
Margin (%) 10.7 12.2 10.2 11.8 10.6 11.1 11.5 11.8 11.2 11.3

January 2024 176

 December 2023 Results Preview | Sector: Logistics

VRL Logistics Buy

CMP: INR763 | TP: INR890 (+17%) EPS CHANGE (%): FY24|25: -5|-2
 Expect revenue to increase ~14% YoY to INR7.7b, driven by  Expect EBITDA at ~INR1.1b; EBITDA margin to improve
13% YoY growth in volumes. slightly by 110bp QoQ.
 Expect adjusted PAT at INR335m (-11% YoY).  Addition of fleet, branch expansion, and volume growth are
the key monitorables.

Quarterly performance
Y/E March (INR m) FY23 FY24E FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
Net Sales 6,143 6,545 6,815 6,982 6,742 7,093 7,733 8,095 26,485 29,663
YoY Change (%) 48.5 2.8 13.3 17.6 9.7 8.4 13.5 15.9 17.9 12.0
EBITDA 913 930 1,033 1,141 1,019 918 1,083 1,197 4,017 4,217
Margin (%) 14.9 14.2 15.2 16.3 15.1 12.9 14.0 14.8 15.2 14.2
YoY Change (%) 153.0 -17.9 -12.1 -0.7 11.7 -1.3 4.8 4.9 5.2 5.0
Depreciation 334 384 421 453 489 522 525 518 1,591 2,055
Interest 120 139 151 133 163 185 180 179 543 706
Other Income 30 22 45 47 89 60 70 68 143 287
PBT before EO expense 488 429 506 602 456 271 448 568 2,025 1,743
Extra-Ord. expense -134 0 -114 -1,322 0 -5 0 0 -1,571 -5
PBT 622 429 620 1,924 456 276 448 568 3,596 1,747
Tax 121 122 128 -7 117 77 113 143 364 449
Rate (%) 19.5 28.4 20.7 -0.4 25.6 27.8 25.2 25.2 10.1 25.7
Reported PAT 501 307 492 1,932 339 199 335 425 3,232 1,298
Adj. PAT 367 307 378 610 339 194 335 425 1,661 1,293
YoY Change (%) NA -38 -33.1 16.6 -7.5 -36.7 -11.3 -30.3 9.2 -22.2
Margin (%) 6.0 4.7 5.5 8.7 5.0 2.7 4.3 5.2 6.3 4.4

January 2024 177

 December 2023 Results Preview | Sector: Metals

Metals
Company Weak exports, festive season, and elevated raw material
Coal India prices to impact performance
Hindalco Industries The metals sector is expected to post a sequential flat performance, with revenue
Hindustan Zinc and EBITDA remaining stable and APAT decreasing by 7% QoQ. This can be
Jindal Steel & Power attributed to: a) softness in volumes, b) higher coal cost, and c) seasonally slow
JSW Steel quarter due to multiple festive holidays, which is off-set by marginal improvement
NMDC in the average ASP. While we expect the non-ferrous sector to post improved
National Aluminum Co. earnings, the ferrous sector is expected to post mixed performance. The mining
companies are expected to report strong volume growth.
Steel Authority of India
Tata Steel
In 3QFY24, average domestic HRC prices have remained largely flat at INR56,350/t,
Vedanta
while rebar prices and CRC prices have improved 5% and 3% QoQ to INR55,812/t
and INR62,946/t, respectively. International iron ore prices increased substantially
by 12% at USD128/t and NMDC undertook two price hikes, aggregating to INR450/t
in 3QFY24.

Similarly, premium HCC was up ~USD73/t (up 27%) QoQ at USD349/t. As Tier-I mills
carry nearly two months of coal inventory, they are likely to experience the negative
impact of increased coking coal prices in 4QFY24. We would await further insights
from the management regarding the influence of elevated coal and iron ore
expenses in the coming quarters.

Steel spreads are currently at one of their lowest levels, and considering higher
imports in Nov-Dec ’23, market participants and vendors are closely monitoring the
demand situation for 4QFY24. However, Tier-I mills continue to focus on the
domestic market and as imports are expected to subside in the coming weeks,
coupled with an uptick in construction activity, volumes are expected to improve in
4QFY24.

HRC and rebar prices, which are currently hovering below INR55,000/t and
INR52,500/t, are expected to improve, driven by resumption in exports to the
EU/MENA region and improvement in international steel prices.

We reiterate our BUY rating on JSP, HNDL, COAL, and NMDC.

Steel: We expect the steel sector to report mixed performance due to reduced
seasonal demand and higher cost, resulting from an increase in iron ore and coal
prices. However, it would be partially offset by an improvement in ASP. The impact
on the volumes are due to weak export volumes in 3QFY24 and lower demand in the
domestic market due to multiple long holidays.

Prices of key input raw materials, especially coking coal, which is currently in the
range of USD340-345/t is expected to adversely impact the margins further in
4QFY24.

Alok Deora – Research Analyst (Alok.Deora@MotilalOswal.com)

Parthiv Jhonsa – Research Analyst (Parthiv.Jhonsa@MotilalOswal.com)
 December 2023 Results Preview | Sector: Metals

Non-ferrous: Metal prices, which had touched a high at the start of CY23, continued
to witness correction in 3QFY24. Copper/nickel/lead were down 2%/15%/2% QoQ at
USD8,169/USD17,257/USD2,121 per tonne, respectively, while aluminum and zinc
improved 2%/3% QoQ at USD2,192/USD2,500 per tonne, respectively.

Non-Ferrous companies under our coverage are expected to post a sequential

decline of 3% in revenue and EBITDA/APAT are expected to increase 5%/29%,
respectively, driven by better performance at HNDL and NACL.

Mining: The e-auction premium for COAL, which came in as a positive surprise of
83% in 2QFY24, is expected to be around 70% in 3QFY24 and is expected to be
around 85% for FY24E. The e-auction premium, which improved in Oct’23, has since
softened due to increased supplies, and it is expected to remain above the long-
term average (LTA). COAL surpassed its committed guidance of 446mt for 9MFY24
by achieving approximately ~8mt higher dispatches to the power sector.

In line with the recent surge in iron ore price in the international market, NMDC has
already undertaken two price hikes in 3QFY24, aggregating to ~INR450/t and has
clocked over 12mt of production in 3QFY24.

Exhibit 1: Relative performance – three months (%) Exhibit 2: Relative performance – one year (%)
Nifty Index MOFSL Metals Index Nifty Index MOFSL Metals Index
120 130

114 120

108 110

102 100

96 90
Oct-23

Dec-23
Sep-23

Nov-23

Mar-23

Jun-23
Dec-22

Dec-23
Sep-23

Sources: MOFSL, Bloomberg Sources: MOFSL, Bloomberg

Exhibit 3: Domestic HRC prices remained relatively stable in Exhibit 4: Primary Rebar prices were up 5% QoQ; the prices
3QFY24 have improved ~INR2,700/t during the quarter
95,000 80,000

81,000
65,000
67,000
50,000
53,000
35,000
39,000

25,000 20,000
Jul'14

Jul'15

Jul'16

Jul'17

Jul'18

Jul'19

Jul'20

Jul'21

Jul'22

Jul'23
Jan'14

Jan'15

Jan'16

Jan'17

Jan'18

Jan'19

Jan'20

Jan'21

Jan'22

Jan'23

Jan'24
Jul'14

Jul'15

Jul'16

Jul'17

Jul'18

Jul'19

Jul'20

Jul'21

Jul'22

Jul'23
Jan'15

Jan'16

Jan'17

Jan'18

Jan'19

Jan'20

Jan'21

Jan'22

Jan'23

Jan'24

Source: MOFSL, Steelmint Source: MOFSL, Steelmint

January 2024 179

 December 2023 Results Preview | Sector: Metals

Exhibit 5: Coking coal prices increased 27% QoQ, rallying to Exhibit 6: Domestic iron ore price (NMDC) has taken two
quarterly average of ~USD350/t price hikes in 3QFY24
800 7,000

600 5,500

400 4,000

200 2,500

0 1,000

Jul'15

Jul'16

Jul'17

Jul'18

Jul'19

Jul'20

Jul'21

Jul'22

Jul'23
Jan'15

Jan'16

Jan'17

Jan'18

Jan'19

Jan'20

Jan'21

Jan'22

Jan'23

Jan'24
Jul'15

Jul'16

Jul'17

Jul'18

Jul'19

Jul'20

Jul'21

Jul'22

Jul'23
Jan'15

Jan'16

Jan'17

Jan'18

Jan'19

Jan'20

Jan'21

Jan'22

Jan'23

Jan'24
Source: MOFSL, Steelmint Source: MOFSL, Steelmint

Exhibit 7: Key assumptions (all amounts in INR b, except for volumes and per tonne)
1QFY23 2QFY23 3QFY23 4QFY23 1QFY24 2QFY24 3QFY24E 4QFY24E QoQ YoY
JSW Steel
Sales - mt 4.5 5.7 5.7 6.5 5.7 6.4 5.9 6.9 -7.6 3.4
Realization/t 84,824 72,784 68,536 71,917 73,928 69,772 69,664 71,086 -0.2 1.6
EBITDA/t 9,597 3,052 7,963 12,158 12,340 12,341 11,159 10,907 -9.6 40.1
Consol Revenue 381 418 391 470 422 446 411 488 -7.7 5.1
Consol EBITDA 43 18 45 79 70 79 66 75 -16.4 44.9
Consol PAT 8 -14 5 37 23 31 21 27 -31.5 328.8
Tata Steel 1QFY23 2QFY23 3QFY23 4QFY23 1QFY24 2QFY24 3QFY24E 4QFY24E QoQ YoY
Standalone
Sales - mt 4.1 4.9 4.6 4.8 4.8 4.8 4.9 5.2 0.8 5.9
Realization/t 78,676 65,672 66,373 71,466 72,427 68,928 70,633 70,074 2.5 6.4
EBITDA/t 23,509 9,866 11,241 16,952 13,808 14,006 14,180 14,004 1.2 26.1
Revenue 320 322 305 343 347 332 343 366 3.3 12.7
EBITDA 96 48 52 81 66 68 69 73 2.1 33.6
PAT 62 27 27 47 46 45 39 41 -12.5 44.1
Consolidated
Sales - mt 6.6 7.2 7.2 7.8 7.2 7.1 7.4 7.7 5.2 4.1
Realization/t 95,671 82,818 79,837 80,927 82,625 78,758 82,549 81,046 4.8 3.4
EBITDA/t 22,584 8,382 5,661 9,279 7,186 6,037 6,743 9,941 11.7 19.1
Consol Revenue 634 599 571 630 595 557 614 622 10.3 7.6
Consol EBITDA 150 61 40 72 52 43 50 76 17.6 23.9
Consol PAT 78 15 -24 17 6 7 6 36 -18.2 LP
TSE
Sales - mt 2.1 1.9 2.0 2.2 2.0 2.0 2.1 2.0 7.1 5.5
Revenue 260 216 207 220 213 202 229 210 13.0 10.3
EBITDA 60 18 -16 -16 -16 -25 -29 -13 NA NA
EBITDA/t (USD) 366 123 -95 -91 -98 -155 -165 -81 NA NA
SAIL 1QFY23 2QFY23 3QFY23 4QFY23 1QFY24 2QFY24 3QFY24E 4QFY24E QoQ YoY
Sales - mt 3.2 4.2 4.2 4.7 3.9 4.8 4.4 4.5 -8.3 6.0
Realization/t 76,185 62,328 60,328 62,232 62,717 58,256 59,248 60,096 1.7 -1.8
EBITDA/t 7,297 1,746 5,007 6,247 4,245 4,429 4,857 4,795 9.6 -3.0
Consol Revenue 240 262 250 291 244 280 261 271 -6.8 4.1
Consol EBITDA 23 7 21 29 16 21 21 22 0.5 2.8
Consol PAT 8 -3 2 12 2 3 3 2 -26.0 4.7
JSP 1QFY23 2QFY23 3QFY23 4QFY23 1QFY24 2QFY24 3QFY24E 4QFY24E QoQ YoY
Sales (mt) 1.7 2.0 1.9 2.0 1.8 2.0 1.9 2.2 -4.0 1.6
Realization/t 74,974 67,271 65,539 67,448 68,415 60,946 61,716 60,785 1.3 -5.8
EBITDA/t 17,200 7,559 12,513 10,775 14,283 11,372 11,013 10,316 -3.2 -12.0
Consol Revenue 130 135 125 137 126 123 119 134 -2.8 -4.4
Consol EBITDA 30 15 24 22 26 23 21 23 -7.0 -10.6
Consol PAT 15 7 9 6 17 14 9 10 -36.9 -2.3
NMDC 1QFY23 2QFY23 3QFY23 4QFY23 1QFY24 2QFY24 3QFY24E 4QFY24E QoQ YoY
Sales - mt 7.8 8.4 9.6 12.4 11.0 9.6 11.4 14.6 19.3 19.3
Realization/t 6,111 3,947 3,885 4,716 4,915 4,194 4,245 4,331 1.2 9.3

January 2024 180

 December 2023 Results Preview | Sector: Metals

1QFY23 2QFY23 3QFY23 4QFY23 1QFY24 2QFY24 3QFY24E 4QFY24E QoQ YoY
EBITDA/t 2,434 1,009 1,191 1,743 1,816 1,244 1,291 1,335 3.7 8.3
Revenue 48 33 37 59 54 40 48 63 20.8 30.3
EBITDA 19 9 11 22 20 12 15 19 23.8 29.2
PAT 14 10 9 16 17 10 12 16 20.3 35.4
HNDL 1QFY23 2QFY23 3QFY23 4QFY23 1QFY24 2QFY24 3QFY24E 4QFY24E QoQ YoY
Aluminum sales - kt 333 341 349 323 341 334 337 338 0.8 -3.5
Copper sales - kt 101 112 109 117 118 134 120 128 -10.4 10.1
Novelis vol- kt 962 984 908 936 879 933 921 987 -1.3 1.4
Novelis adj EBITDA (USD m) 561 506 341 403 421 484 451 488 -6.8 32.3
Consol Revenue 580 562 532 559 530 542 508 577 -6.3 -4.5
Consol EBITDA 84 54 35 53 57 56 62 63 9.8 73.7
Consol PAT 41 22 14 24 25 22 29 30 33.1 111.5
HZL 1QFY23 2QFY23 3QFY23 4QFY23 1QFY24 2QFY24 3QFY24E 4QFY24E QoQ YoY
Zinc vol (India) - kt 206 189 210 216 208 185 203 227 9.7 -3.3
Lead vol (India) - kt 54 57 46 54 50 57 56 56 -1.8 21.7
Silver vol- t 177 194 161 182 179 181 197 170 8.8 22.4
Consol Revenue 94 83 79 85 73 68 75 84 9.9 -5.1
Consol EBITDA 51 44 37 43 33 31 34 37 7.1 -9.3
Consol PAT 31 27 22 26 20 17 18 21 5.4 -15.4
VED 1QFY23 2QFY23 3QFY23 4QFY23 1QFY24 2QFY24 3QFY24E 4QFY24E QoQ YoY
Consol Revenue 386 367 341 379 337 342 337 360 -1.5 -1.2
Consol EBITDA 102 77 71 95 64 67 67 75 -0.8 -5.7
Consol PAT 44 14 16 31 9 5 10 15 99.7 -37.6
NACL 1QFY23 2QFY23 3QFY23 4QFY23 1QFY24 2QFY24 3QFY24E 4QFY24E QoQ YoY
Consol Revenue 38 35 33 37 32 30 33 37 6.9 -1.1
Consol EBITDA 9 3 5 8 6 4 5 6 20.6 4.0
Consol PAT 6 1 3 5 3 2 2 3 25.9 -8.0
COAL 1QFY23 2QFY23 3QFY23 4QFY23 1QFY24 2QFY24 3QFY24E 4QFY24E QoQ YoY
Sales - mt 178 155 176 187 187 174 191 199 9.9 8.7
NSR - FSA INR/t 1,443 1,414 1,482 1,550 1,536 1,542 1,542 1,526 0.0 4.0
E-auction premium 201 329 241 192 144 83 70 56 -16.1 -70.9
EBITDA/t 717 519 639 461 597 512 443 413 -13.4 -30.6
Consol Revenue 351 298 352 382 360 328 348 355 6.2 -1.1
Consol Adj EBITDA 127 80 112 86 112 89 85 82 -4.6 -24.5
Consol PAT 88 60 78 55 80 68 57 49 -16.7 -27.0

Exhibit 8: Domestic sales volumes (mt) likely to be lower QoQ and flattish YoY
Sales Volume 1QFY23 2QFY23 3QFY23 4QFY23 1QFY24 2QFY24 3QFY24E 4QFY24E QoQ YoY
JSW Steel 4.5 5.7 5.7 6.5 5.7 6.4 5.9 6.9 -7.6 3.4
Tata Steel 6.6 7.2 7.2 7.8 7.2 7.1 7.4 7.7 5.2 4.1
SAIL 3.2 4.2 4.2 4.7 3.9 4.8 4.4 4.5 -8.3 6.0
JSPL 1.7 2.0 1.9 2.0 1.8 2.0 1.9 2.2 -4.0 1.6
Total 16.0 19.2 18.9 21.0 18.6 20.3 19.7 21.3 -2.9 4.0
Sources: MOFSL, Company

Exhibit 9: ASP expected to improve sequentially in 3QFY24, in line with increase in prices
ASP 1QFY23 2QFY23 3QFY23 4QFY23 1QFY24 2QFY24 3QFY24E 4QFY24E QoQ YoY
JSW Steel 84,824 72,784 68,536 71,917 73,928 69,772 69,664 71,086 -0.2 1.6
Tata Steel 95,671 82,818 79,837 80,927 82,625 78,758 82,549 81,046 4.8 3.4
SAIL 76,185 62,328 60,328 62,232 62,717 58,256 59,248 60,096 1.7 -1.8
JSPL 74,974 67,271 65,539 67,448 68,415 60,946 61,716 60,785 1.3 -5.8
Sources: MOFSL, Company

Exhibit 10: EBITDA/t to be soft for most companies QoQ

EBITDA/t 1QFY23 2QFY23 3QFY23 4QFY23 1QFY24 2QFY24 3QFY24E 4QFY24E QoQ YoY
JSW Steel 9,597 3,052 7,963 12,158 12,340 12,341 11,159 10,907 -9.6 40.1
Tata Steel 22,584 8,382 5,661 9,279 7,186 6,037 6,743 9,941 11.7 19.1
SAIL 7,297 1,746 5,007 6,247 4,245 4,429 4,857 4,795 9.6 -3.0
JSPL 17,200 7,559 12,513 10,775 14,283 11,372 11,013 10,316 -3.2 -12.0
Sources: MOFSL, Company

January 2024 181

 December 2023 Results Preview | Sector: Metals

Exhibit 11: Key commodity prices

Abs % Abs %
Non-ferrous metal price movement UoM 1QFY23 2QFY23 3QFY23 4QFY23 1QFY24 2QFY24 3QFY24
YoY YoY QoQ QoQ
Copper-LME USD/t 9,539 7,754 8,010 8,919 8,472 8,356 8,169 159 2% -187 -2%
Aluminum-LME USD/t 2,883 2,356 2,324 2,395 2,261 2,154 2,192 -132 -6% 38 2%
Zinc-LME USD/t 3,936 3,278 3,000 3,123 2,536 2,427 2,500 -500 -17% 73 3%
Nickel-LME USD/t 29,018 22,105 25,581 26,033 22,333 20,396 17,257 -8,324 -33% -3,138 -15%
Lead-LME USD/t 2,207 1,977 2,104 2,143 2,117 2,170 2,121 17 1% -50 -2%
Alumina-Spot USD/t 377 339 319 356 349 336 334 14 5% -2 -1%
Silver USD/oz 23 19 21 22 24 24 23 2 10% -0 -2%
Brent USD/bbl 113 99 88 81 78 87 84 -4 -5% -3 -3%
China Steel Prices
China TMT RMB/t 4,847 4,164 3,969 4,289 3,842 3,822 4,023 54 1% 201 5%
China HRC RMB/t 4,941 4,077 3,941 4,291 3,947 3,937 3,946 5 0% 8 0%
China Wire Rod RMB/t 5,329 4,604 4,424 4,666 4,231 4,189 4,331 -92 -2% 142 3%
India Domestic Prices
HRC India FoB USD/t 872 597 557 676 629 572 580 23 4% 8 1%
HRC Dom Mum INR/t 69,962 57,662 55,607 59,189 57,544 56,663 56,350 743 1% -313 -1%
Billet Raigarh INR/t 50,689 48,147 44,471 46,076 44,102 42,348 40,676 -3,794 -9% -1,672 -4%
Wire Rod - Dom INR/t 65,912 57,750 54,992 57,309 54,076 51,669 54,393 -599 -1% 2,725 5%
TMT Primary Mum INR/t 67,465 57,135 56,247 61,212 56,495 53,114 55,812 -435 -1% 2,698 5%
TMT Secondary Mum INR/t 59,451 55,051 53,789 56,702 52,383 49,264 49,560 -4,229 -8% 296 1%
Pig Iron SG Durgapur INR/t 52,042 46,514 41,908 43,585 42,282 40,665 38,076 -3,832 -9% -2,589 -6%
CRC Mum INR/t 79,485 67,046 62,746 64,081 62,086 60,975 62,946 200 0% 1,971 3%
Galvanized Plain INR/t 82,992 69,238 65,469 72,964 71,117 67,983 69,092 3,622 6% 1,108 2%
Color Coated INR/t 91,331 77,923 74,500 80,176 81,138 79,021 78,925 4,425 6% -96 0%
Coking Coal / Coke
HCC China USD/t 416 291 275 276 199 213 263 -11 -4% 50 24%
HCC Prem India CNF USD/t 482 271 294 357 260 276 349 55 19% 73 27%
HCC Mid Vols India CNF USD/t 446 248 276 327 231 236 285 9 3% 49 21%
PCI Coal CNF India USD/t 455 265 289 328 226 182 204 -85 -29% 21 12%
Iron Ore
62% CNF China - Aus USD/t 139 104 99 125 111 114 128 29 29% 14 12%
Odisha Fines - 62% INR/t 4,815 4,815 4,815 4,815 4,815 4,815 4,815 - 0% - 0%
K'taka Fines Fe 60% INR/t 3,157 2,223 2,050 2,644 3,000 2,706 3,483 1,433 70% 777 29%
NMDC 64 %Fines (C'garh) INR/t 4,510 2,877 2,860 3,623 3,923 3,999 4,546 1,686 59% 547 14%
NMDC 65%-Lumps INR/t 4,845 3,353 3,360 4,077 4,020 4,570 5,206 1,846 55% 636 14%
Domestic Pellet INR/t 9,413 7,156 7,520 9,376 8,445 8,270 8,532 1,012 13% 262 3%
Sponge Iron- Raigarh INR/t 33,064 32,948 29,820 31,016 28,190 27,930 27,029 -2,791 -9% -902 -3%
China Chrome Ore (40-42%) USD/t 288 243 228 279 285 289 286 58 26% -3 -1%
Odisha Chrome Ore (E-Auction) INR/t 20,770 16,264 18,423 20,392 21,037 25,848 30,110 11,687 63% 4,262 16%
USD/
Global Mn Ore 38% 5.30 4.63 4.24 4.53 4.00 3.75 3.71 -0.53 -12% -0 -1%
dmtu
USD/
Mn Ore India Mn 44% Fe 5% 7.80 6.03 4.72 5.84 4.92 4.58 4.38 -0.34 -7% -0 -4%
dmtu
Balaghat Mn 37.5%, Fe 7% INR/t 17260 14772 12,810 13,513 12,529 11,871 12,084 -726 -6% 213 2%
Silico manganese INR/t 92055 77751 75,175 76,884 73,401 68,067 64,202 -10,973 -15% -3,865 -6%
Ferro Manganese INR/t 97215 80902 75,328 78,772 75,075 69,132 64,738 -10,590 -14% -4,393 -6%
% Abs %
Currency Currency 1QFY23 2QFY23 3QFY23 4QFY23 1QFY24 2QFY24 3QFY24 Abs YoY
YoY QoQ QoQ
EUR/USD EUR/USD 1.06 1.01 1.02 1.07 1.09 1.09 1.08 0.05 5% -0 -1%
USD/CNY USD/CNY 6.61 6.85 7.11 6.84 7.02 7.25 7.22 0.11 2% -0 0%
USD/GBP USD/GBP 0.80 0.85 0.85 0.82 0.80 0.79 0.81 -0.05 -5% 0 2%
USD/INR USD/INR 77.19 79.81 82.22 82.25 82.19 82.68 83.26 1.04 1% 1 1%
GBP/INR GBP/INR 96.92 93.81 96.50 99.96 102.92 104.63 103.37 6.88 7% -1 -1%
EUR/INR EUR/INR 82.18 80.34 84.03 88.27 89.49 89.95 89.63 5.59 7% -0 0%
Sources: MOFSL, Bloomberg, Steelmint

January 2024 182

 December 2023 Results Preview | Sector: Metals

Exhibit 12: Summary of expected quarterly performance

SALES (INR M) EBDITA (INR M) NET PROFIT (INR M)
CMP
RECO Var Var Var Var Var Var
Sector (INR) Dec-23 Dec-23 Dec-23
% YoY % QoQ % YoY % QoQ % YoY % QoQ
Coal India 382 Buy 3,47,929 -1.1 6.2 84,831 -24.5 -4.6 56,651 -27.0 -16.7
Hindalco 609 Buy 5,07,567 -4.5 -6.3 61,630 73.7 9.8 28,811 111.5 33.1
Hindustan Zinc 318 Neutral 74,663 -5.1 9.9 33,630 -9.3 7.1 18,230 -15.4 5.4
JSPL 743 Buy 1,19,088 -4.4 -2.8 21,251 -10.6 -7.0 8,763 -2.3 -36.9
JSW Steel 877 Neutral 4,11,389 5.1 -7.7 65,899 44.9 -16.4 21,014 328.8 -31.5
Nalco 136 Neutral 32,538 -1.1 6.9 4,781 4.0 20.6 2,359 -8.0 25.9
NMDC 212 Buy 48,478 30.3 20.8 14,738 29.2 23.8 12,352 35.4 20.3
SAIL 125 Neutral 2,60,691 4.1 -6.8 21,369 2.8 0.5 2,552 4.7 -26.0
Tata Steel 140 Neutral 6,14,167 7.6 10.3 50,170 23.9 17.6 5,748 LP -18.2
Vedanta 257 Neutral 3,36,764 -1.2 -1.5 66,669 -5.7 -0.8 9,744 -37.6 99.7
Metals 27,53,273 1.6 0.0 4,24,968 5.7 0.0 1,66,224 25.5 -7.1
Source: MOFSL

Exhibit 13: Valuation summary

CMP EPS (INR) PE (x) PB (x) ROE (%)
Company Name INR Reco FY24E FY25E FY26E FY24E FY25E FY26E FY24E FY25E FY26E FY24E FY25E FY26E
Metals 15.9 11.8 10.3 2.3 2.1 1.8 14.4 17.4 17.9
Coal India 382 Buy 41.1 41.1 45.9 9.3 9.3 8.3 3.4 2.9 2.5 36.3 30.9 29.5
Hindalco 609 Buy 47.3 56.7 64.1 12.9 10.8 9.5 1.7 1.5 1.3 14.2 14.9 14.7
Hindustan Zinc 318 Neutral 18.0 23.1 25.0 17.7 13.8 12.8 9.5 7.1 5.5 56.0 59.1 48.8
JSPL 743 Buy 48.1 56.6 80.4 15.4 13.1 9.2 1.7 1.6 1.3 11.8 12.5 15.6
JSW Steel 877 Neutral 42.3 65.3 73.7 20.7 13.4 11.9 2.9 2.5 2.1 14.7 19.8 19.1
Nalco 136 Neutral 5.8 8.8 10.9 23.6 15.5 12.5 1.8 1.7 1.6 7.9 11.4 13.2
NMDC 212 Buy 18.6 21.5 24.5 11.3 9.8 8.6 2.4 2.1 1.9 22.6 23.0 23.1
SAIL 125 Neutral 2.6 7.9 10.5 48.8 15.8 11.9 0.9 0.9 0.8 1.9 5.7 7.3
Tata Steel 140 Neutral 4.5 10.9 12.6 31.1 12.8 11.1 1.9 1.8 1.6 5.9 14.2 15.3
Vedanta 257 Neutral 10.3 20.1 22.7 25.0 12.8 11.4 3.7 3.9 3.8 11.7 29.6 33.8

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The tables below provide a snapshot of actual and estimated numbers for companies under the MOFSL coverage
universe. Highlighted columns indicate the quarter/financial year under review.
Coal India (COAL) Buy
CMP: INR 382 | TP: INR 430 (+13%)
 COAL dispatches grew 8.8% YoY to 191mt during 3Q FY24  Management guidance on FY24 and FY25 production, e-
 Expect e-auction premium to be at 70% during 3Q FY24 auction volumes and premium are important indicators to
look out for

Quarterly Performance (INR b)

Y/E March FY23 FY24E FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
Sales 351 298 352 382 360 328 348 355 1,383 1,391
Change YoY (%) 38.8 28.1 23.7 16.6 2.5 9.8 -1.1 -6.9 26.0 0.6
Change QoQ (%) 7.3 -15.0 17.9 8.5 -5.7 -8.9 6.2 2.0
Adj. EBITDA 127 80 112 86 112 89 85 82 406 368
Change YoY (%) 177.6 99.9 52.1 -30.7 -12.4 10.9 -24.5 -4.7 42.8 -9.5
Change QoQ (%) 2.1 -37.0 40.1 -23.1 29.1 -20.3 -4.6 -2.9
EBITDA per tonne 717 519 639 461 597 512 443 413 584 489
Depreciation 10 11 13 13 11 12 14 16 47 54
OBR 5 7 8 17 6 8 10 11 38 34
Interest 2 1 2 2 2 2 2 2 7 8
Other Income 10 18 16 22 15 20 16 13 66 64
PBT after EO 121 78 105 76 107 88 75 66 380 335
Tax 32 16 29 21 28 20 19 18 99 85
Tax Rate (%) 26.8 21.0 27.4 27.9 25.8 23.2 25.2 26.8 26.0 25.2
PAT before MI & Asso. 89 62 76 55 80 67 56 48 281 251
Sh. of Assoc. (0) (1) 1 1 (0) 1 1 1 (0) 2
PAT after MI & Asso. 88 60 78 55 80 68 57 49 282 253
Adjusted PAT 88 60 78 55 80 68 57 49 282 253
Change YoY (%) 178.3 105.7 70.1 -17.5 -9.8 12.5 -27.0 -11.9 62.1 -10.1
Change QoQ (%) 31.7 -31.6 28.3 -28.7 44.1 -14.7 -16.7 -13.9

Hindalco (HNDL) Buy

CMP: INR 609 | TP: INR 750 (+23%)
 Novelis sales volumes are expected to be lower on a  Timeline on the commissioning of multiple capex is crucial
sequential basis.  We await management guidance on domestic aluminum
 Novelis EBITDA/t guidance of USD525/t is crucial demand along with the hedging position
Quarterly Performance (INR b)
Y/E March FY23 FY24E FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
Net Sales 580 562 532 559 530 542 508 577 2,232 2,156
Change (YoY %) 40.2 17.9 5.7 0.2 -8.7 -3.6 -4.5 3.2 14.4 -3.4
Change (QoQ %) 4.0 -3.2 -5.4 5.1 -5.1 2.2 -6.3 13.6 0.0
Total Expenditure 496 508 496 505 473 486 446 513 2,005 1,917
EBITDA 84 54 35 53 57 56 62 63 227 238
Change (YoY %) 37.5 -28.9 -51.9 -27.1 -32.2 4.7 73.7 19.2 -20.0 5.2
Change (QoQ %) 15.4 -36.4 -33.8 50.1 7.3 -1.8 9.8 3.0 0.0
As % of Net Sales 14.5 9.5 6.7 9.5 10.8 10.4 12.1 11.0 10.2 11.1
Interest 9 9 9 10 10 10 10 10 36 41
Depreciation 17 17 18 19 18 18 17 18 71 71
Other Income 2 3 4 4 4 5 3 3 13 15
PBT (before EO item) 60 31 12 28 33 32 37 39 132 142
PBT (after EO item) 61 31 12 28 33 32 37 39 132 142
Current Tax 11 7 4 7 5 8 9 9 29 30
Deferred Tax 9 2 -5 -2 4 3 0 0 3 6
Total Tax 20 9 -1 4 9 10 9 9 31 37
% Tax 32.4 28.9 -12.2 15.1 26.0 32.0 23.0 23.3 23.8 25.8
Adjusted PAT 41 22 14 24 25 22 29 30 101 105
Change (YoY %) 55.0 -36.1 -60.2 -41.4 -39.5 -1.9 111.5 23.9 -26.2 0.0
Change (QoQ %) -0.9 -45.9 -38.2 77.0 2.3 -12.3 33.1 3.7

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Hindustan Zinc (HZ) Neutral

CMP: INR 318 | TP: INR 295 (-7%)
 Guidance on CoP, volumes, and realizations are critical  Guidance on future dividend payout is important
 Premium commanded by zinc and lead above LME prices  We await further insights on any other update related to
are crucial the change in corporate structure, if any
Quarterly Performance (INR b)
Y/E March FY23 FY24E FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
Sales
Zinc refined (kt) 206 189 210 216 208 185 203 227 821 823
Lead refined (kt) 54 57 46 54 50 57 56 56 211 219
Silver (tonnes) 177 194 161 182 179 181 197 170 714 727
Net Sales 94 83 79 85 73 68 75 84 341 300
Change (YoY %) 43.7 36.2 -1.6 -3.3 -22.4 -18.5 -5.1 -1.1 15.8 -12.2
Change (QoQ %) 6.7 -11.2 -5.6 8.2 -14.4 -6.7 9.9 12.7
EBITDA 51 44 37 43 33 31 34 37 175 136
Change (YoY %) 44.4 32.1 -15.2 -14.2 -34.8 -28.8 -9.3 -12.2 7.9 -22.4
Change (QoQ %) 3.5 -14.2 -15.9 14.8 -21.3 -6.2 7.1 11.1
Finance cost 0 1 1 2 2 2 2 3 3 10
DD&A 7 8 8 9 8 8 9 9 33 35
Other Income 3 4 3 4 3 2 2 3 14 10
PBT (before EO item) 47 39 32 35 26 23 24 28 153 101
PBT (after EO) 47 39 32 35 26 23 24 28 153 101
Total Tax 16 12 10 9 6 6 6 7 48 25
% Tax 33.8 31.7 32.3 26.3 24.8 25.0 25.2 25.2 31.2 25.0
Reported PAT 31 27 22 26 20 17 18 21 105 76
Adjusted PAT 31 27 22 26 20 17 18 21 105 76
Change (YoY %) 55.9 32.9 -20.2 -11.8 -36.5 -35.5 -15.4 -19.5 9.2 -27.8
Change (QoQ %) 5.6 -13.3 -19.6 19.8 -24.0 -12.0 5.4 14.0

Jindal Steel & Power (JSP) Buy

CMP: INR 743 | TP: INR 900 (+21%)
 Management commentary on the reduction/increase in  Management commentary on further debt reduction will
ASP and coal cost is critical be the key monitorable
 Management commentary on the capex timelines is  Management guidance on captive mines and raw material
important is important
Quarterly Performance (INR b)
Y/E March FY23 FY24E FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
Net Sales 130 135 125 137 126 123 119 134 527 501
Change (YoY %) 23.0 -0.7 -0.6 -4.5 -3.5 -9.4 -4.4 -2.3 3.2 -4.9
Change (QoQ %) -9.0 3.6 -7.9 10.0 -8.1 -2.7 -2.8 12.3
EBITDA 34 19 24 22 26 23 21 23 99 93
Change (YoY %) -24.2 -58.0 -28.2 -28.8 -23.6 18.3 -10.6 3.8 -36.0 -6.3
Change (QoQ %) 12.0 -43.8 23.1 -8.0 20.2 -13.0 -7.0 6.8
EBITDA/t 19,763 9,609 12,513 10,775 14,283 11,372 11,013 10,316 12,936 11,665
Interest 4 4 3 4 3 3 3 4 14 14
Depreciation 6 6 6 9 6 6 6 6 27 25
Other Income 0 0 0 0 1 0 0 0 1 1
PBT (before EO item) 25 10 14 10 18 14 12 13 59 56
Extra-ordinary Income 1 -9 -4 -2 0 0 0 0 -14 0
PBT (after EO item) 26 1 11 8 18 14 12 13 45 56
Total Tax 6 -2 5 3 1 -0 3 3 13 7
% Tax 22.4 -303.9 51.2 42.2 4.2 -0.4 25.2 25.2 28.8 12.3
Adjusted PAT 15 7 9 6 17 14 9 10 37 49
Change (YoY %) -42.5 -73.4 -45 -68.4 15.3 102.2 -2 55.3 -57.9 34.0
Change (QoQ %) -24.9 -53.1 31 -31.3 173.8 -17.7 -37 9.2
Off Book Adjustments -4 -4 0 0 0 0 0 0 -9 0

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JSW Steel (JSTL) Neutral

CMP: INR 877 | TP: INR 910 (+4%)
 JSTL is expected to post a QoQ decline in volumes in
3QFY24
 Coal costs are expected to remain at elevated levels in
2HFY24
 Management commentaries on capex is important
 Performance of domestic and overseas subsidiaries will be
crucial
 Management commentaries on FY24E production and
sales are important monitorables

Quarterly Performance (Consolidated) (INR b)

Y/E March FY23 FY24E FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
Net Sales 381 418 391 470 422 446 411 488 1,660 1,767
Change (YoY %) 31.8 28.5 2.8 0.1 10.8 6.7 5.1 3.9 13.4 6.5
Change (QoQ %) -18.8 9.7 -6.3 20.0 -10.1 5.6 -7.7 18.6
EBITDA 43 18 45 79 70 79 66 75 185 290
Change (YoY %) -58.1 -83.2 -50.2 -13.6 63.5 350.1 44.9 -5.7 -52.5 56.4
Change (QoQ %) -53.1 -59.3 159.5 74.6 -11.2 11.9 -16.4 13.6 0.0
EBITDA (INR per ton) 9,597 3,052 7,963 12,158 12,340 12,341 11,159 10,907 8,254 11,664
Interest 14 15 18 21 20 21 19 20 69 80
Depreciation 18 18 19 20 19 20 21 21 75 81
Other Income 2 2 2 5 3 2 2 2 10 10
PBT (before EO Item) 13 -14 10 43 35 40 28 37 52 140
EO Items 0 6 0 0 0 6 0 0 6 6
PBT (after EO Item) 13 -8 10 43 35 46 28 37 58 146
Total Tax 4 1 5 5 11 18 7 9 15 45
PAT before MI and Asso. 9 -9 5 37 25 28 21 27 43 101
MI (Profit)/Loss 0.0 0.7 0.2 -0.8 -0.9 -0.1 0.0 0.0 0.1 -1.0
Share of P/(L) of Ass. -0.2 -0.6 -0.6 -0.1 -0.3 -0.2 0.0 0.0 -1.4 -0.6
Reported PAT (after MI & Asso.) 8 -8 5 37 23 28 21 27 41 99
Adjusted PAT 8 -14 5 37 23 31 21 27 36 102
Change (YoY %) -85.8 PL -88.8 -7.8 179.0 LP 328.8 -25.9 -83.4 187.7
Change (QoQ %) -78.9 PL LP 647.8 -36.2 31.1 -31.5 29.2

NMDC Buy
CMP: INR 212 | TP: INR 240 (+13%)
 Total sales volumes for 4QFY24 and 2HFY24 are key  Plans to expand its current capacity and discussions
monitorables around the timeline for the expansion are ongoing
 NMDC has taken two price hikes in 3QFY24  Any guidance on capex and commissioning of new mines
(ECs) are the key monitorables
Consolidated Quarterly Performance
Y/E March FY23 FY24E FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
Net Sales 47.7 33.3 37.2 58.5 53.9 40.1 48.5 63.0 176.7 205.6
Change (YoY %) -26.8 -51.0 -36.7 -12.7 13.2 20.6 30.3 7.7 -31.7 16.4
Change (QoQ %) -28.9 -30.2 11.8 57.3 -7.8 -25.6 20.8 30.0
EBITDA 19.0 8.5 11.4 21.6 19.9 11.9 14.7 19.4 60.5 66.0
Change (YoY %) -54.5 -72.7 -56.3 -19.4 5.0 39.9 29.2 -10.1 -51.9 9.1
Change (QoQ %) -29.2 -55.2 34.0 89.6 -7.8 -40.3 23.8 31.8
EBITDA per ton (INR/t) 2,434 1,009 1,191 1,743 1,816 1,244 1,291 1,335 1,584 1,419
Interest 0.2 0.2 0.3 0.1 0.1 0.2 0.2 0.2 0.8 0.6
Depreciation 0.8 0.7 0.8 0.9 0.7 0.9 0.9 1.0 3.4 3.5
Other Income 1.5 4.3 2.0 -0.1 2.9 3.2 2.9 2.4 7.7 11.4
PBT (before EO Item) 19.4 11.9 12.3 20.5 22.1 14.0 16.5 20.7 64.1 73.4
Extra-ordinary item 0.0 0.0 0.0 12.4 0.0 0.0 0.0 0.0 12.4 0.0
PBT (after EO Item) 19.4 11.9 12.3 32.9 22.1 14.0 16.5 20.7 76.5 73.4
Total Tax 4.7 3.0 3.3 10.1 5.5 3.8 4.2 5.2 21.1 18.7
% Tax 24.3 25.3 26.6 30.7 24.9 27.0 25.2 25.2 27.6 25.5
PAT after MI and Sh. of Asso. 14.5 9.7 9.1 22.7 16.5 10.3 12.4 15.5 56.0 54.6
Adjusted PAT 14.5 9.7 9.1 15.7 16.5 10.3 12.4 15.5 49.0 54.6
Change (YoY %) -54.7 -58.5 -55.5 -13.3 14.3 5.6 35.4 -1.4 -47.7 11.5
Change (QoQ %) -20.3 -32.7 -6.2 72.3 5.1 -37.9 20.3 25.5

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Nalco (NACL) Neutral

CMP: INR 136 | TP: INR 130 (-4%)
 Management guidance on production and sales volumes  We await management guidance on domestic demand
for FY24E will be monitored closely  We await management guidance on CoP and capex
timeline
Quarterly Performance INR m
Y/E March FY23 FY24E FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
Net Sales 37,833 34,896 32,900 36,709 31,784 30,434 32,538 36,518 1,42,337 1,31,274
Change (YoY %) 52.9 -2.9 -12.8 -15.4 -16.0 -12.8 -1.1 -0.5 0.4 -7.8
Change (QoQ %) -12.8 -7.8 -5.7 11.6 -13.4 -4.2 6.9 12.2
Total Expenditure 29,147 31,552 28,302 29,043 25,840 26,469 27,757 30,643 1,18,044 1,10,709
EBITDA 8,687 3,344 4,598 7,665 5,943 3,965 4,781 5,875 24,293 20,565
Change (YoY %) 49.6 -70.3 -61.4 -52.6 -31.6 18.6 4.0 -23.4 -46.2 -15.3
Change (QoQ %) -46.3 -61.5 37.5 66.7 -22.5 -33.3 20.6 22.9
Interest 39 41 42 7 23 40 46 47 129 155
Depreciation 1,497 1,537 1,571 2,554 1,697 1,862 1,832 1,938 7,158 7,329
Other Income 629 693 663 559 485 686 552 484 2,544 2,208
PBT (after EO) 7,781 2,459 3,648 5,663 4,709 2,750 3,455 4,375 19,550 15,288
Total Tax 1,994 758 910 444 1,215 687 868 1,096 4,105 3,867
% Tax 25.6 30.8 24.9 7.8 25.8 25.0 25.1 25.1 21.0 25.3
PAT before MI and Asso. 5,786 1,701 2,739 5,219 3,494 2,063 2,587 3,278 15,445 11,422
Sh. of Associate -207 -447 -175 -269 -156 -189 -228 -267 -1,098 -841
Reported PAT after MI and Asso. 5,579 1,254 2,563 4,950 3,338 1,874 2,359 3,011 14,347 10,581
Adjusted PAT 5,579 1,254 2,563 4,950 3,338 1,874 2,359 3,011 14,347 10,581
Change (YoY %) 60.4 -83.2 -69.2 -51.7 -40.2 49.4 -8.0 -39.2 -51.4 -26.2
Change (QoQ %) -45.6 -77.5 104.4 93.1 -32.6 -43.9 25.9 27.6

SAIL Neutral
CMP: INR 125 | TP: INR 120 (-4%)
 SAIL guidance on crude steel production for FY24 is crucial;  Management guidance on handling the key input costs and
volumes are expected to be lower in 3QFY24 debt reduction roadmap will be critical
 Management guidance on debottlenecking programme and  Guidance on domestic and international steel prices and
the timelines for its implementation are important factors to capex will be critical
consider
Quarterly Performance (INR b)
Y/E March FY23 FY24E FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
Net Sales 240 262 250 291 244 280 261 271 1,044 1,055
Change (YoY %) 16.4 -2.2 -0.8 -5.3 1.4 6.5 4.1 -6.8 0.9 1.0
Change (QoQ %) -21.9 9.2 -4.6 16.3 -16.4 14.8 -6.8 4.1
Total Expenditure 217 255 230 262 227 258 239 250 964 975
EBITDA 23 7 21 29 16 21 21 22 80 81
Change (YoY %) -64.9 -89.6 -39.1 -33.0 -28.4 189.2 2.8 -26.0 -62.4 0.5
Change (QoQ %) -47.1 -68.1 182.7 40.7 -43.6 28.9 0.5 1.3
EBITDA per ton (INR) 7,297 1,746 5,007 6,247 4,245 4,429 4,857 4,795 4,964 4,589
Interest 4 5 6 5 6 6 6 6 20 25
Depreciation 12 12 12 14 13 13 14 14 50 54
Other Income 2 4 1 3 5 1 2 2 10 10
PBT (before EO Inc.) 9 -6 3 13 2 3 3 3 20 12
EO Income(exp) 0 0 3 -0 0 13 0 0 3 13
PBT (after EO Inc.) 9 -6 6 13 2 17 3 3 22 25
Total Tax 2 -1 2 4 1 5 1 1 7 7
% Tax 26.9 20.3 29.9 31.3 33.7 27.7 25.2 25.2 31.9 27.6
Adjusted PAT 8 -3 2 12 2 3 3 2 19 11
Change (YoY %) -79.8 PL LP -53.5 -73.6 LP 4.7 -79.7 -84.8 -45.0
Change (QoQ %) -65.6 PL LP 392.1 -82.3 62.3 -26.0 -4.8
Off Book Adj (if any) 0.00 0.00 0.0 0.00 0.00 0.00 0.0 0.00 0.00 0.0

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Tata Steel (TATA) Neutral

CMP: INR 140| TP: INR 130 (-7%)
 Management commentary on European operations  We await details on debt reduction and capex timeline,
especially the UK is critical which will double the domestic capacity by FY30.
 Management guidance on ASP and CoP across  We await an update on the BF status in the Netherlands
geographies to be monitored
Quarterly Performance (Consolidated) (INR b)
Y/E March FY23 FY24E FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
Net Sales 634 599 571 630 595 557 614 622 2,434 2,388
Change (YoY %) 18.6 -0.9 -6.1 -9.1 -6.2 -7.0 7.6 -1.1 -0.2 -1.9
Change (QoQ %) -8.4 -5.6 -4.7 10.3 -5.5 -6.4 10.3 1.3
EBITDA 150 61 40 72 52 43 50 76 323 221
Change (YoY %) -7.1 -63.2 -74.5 -52.0 -65.4 -29.6 23.9 5.8 -49.1 -31.6
Change (QoQ %) -0.4 -59.5 -33.2 78.3 -28.3 -17.5 17.6 52.2
(% of Net Sales) 23.6 10.1 7.1 11.5 8.7 7.7 8.2 12.3 13.3 9.3
Interest 12 15 18 18 18 20 18 16 63 71
Depreciation 22 23 24 24 24 25 24 25 93 98
Other Income 3 3 3 2 12 2 2 3 10 19
PBT (before EO Inc.) 118 25 2 32 21 1 10 39 177 71
EO Income(exp) 0 0 2 0 0 -69 1 -69
PBT (after EO Inc.) 117 25 3 32 21 -68 10 39 178 2
Total Tax 42 13 29 18 13 -2 6 8 102 25
% Tax 35.6 51.9 NA 54.6 63.0 NA 55.0 21.0 57.4 35.0
PAT before MI and Sh. of associate 76 12 -26 15 8 -66 5 31 77 -23
Minority Interests -1 -2 -3 -1 -1 -3 -7 -4
Share of asso. 2 1 1 1 -3 1 1 5 4 5
Adj. PAT (after MI & asso) 78 15 -24 17 6 7 6 36 86 55
Change (YoY %) -14.1 -86.5 PL -83.1 -92.0 -54.2 LP 111.9 -78.5 -36.6
Change (QoQ %) -22.2 -80.3 PL LP -63.4 13.2 -18.2 524.1

Vedanta (VEDL) Neutral

CMP: INR 257 | TP: INR 240 (-7%)
 Management guidance on future dividend payout is  Management guidance on the demerger timeline of
critical different verticals is critical
 Management update on parent debt situation is crucial  Management guidance on volumes and CoP across
verticals is a key monitorable
Quarterly Performance (INR b)
Y/E March FY23 FY24E FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
Net Sales 386 367 341 379 337 342 337 360 1,473 1,376
Change (YoY %) 35.9 20.6 0.0 -4.8 -12.7 -6.7 -1.2 -5.1 11.0 -6.6
Change (QoQ %) -3.0 -5.1 -7.0 11.2 -11.1 1.3 -1.5 6.9
EBITDA 102.0 77.0 70.7 94.6 64.2 67.2 66.7 75.4 344.2 273.4
Change (YoY %) 1.8 -25.7 -34.6 -30.6 -37.0 -12.7 -5.7 -20.3 -23.2 -20.6
Change (QoQ %) -25.2 -24.5 -8.2 33.8 -32.1 4.6 -0.8 13.1
As % of Net Sales 26.4 21.0 20.7 24.9 19.0 19.7 19.8 20.9 23.4 19.9
Finance cost 12 16 16 18 21 25 25 25 62 96
DD&A 25 26 27 28 26 26 26 26 106 104
Other Income 7 7 7 7 5 6 7 7 29 26
PBT (before EO item) 73 41 35 56 23 22 23 31 205 99
EO exp. (income) 0 -2 -9 13 -18 -43 0 0 2 -61
PBT (after EO item) 73 44 44 43 41 65 23 31 203 159
Total Tax 16.7 16.7 13.0 11.3 7.8 90.9 5.7 8 57.7 112
% Tax 23.0 38.4 29.6 26.4 19.0 140.7 25.2 25.2 28.5 70.5
PAT before MI and Asso. 56 27 31 31 33 -9 17 23 145 64
Profit from Asso. 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0 0.0 0
Minority interest 11.7 8.8 6.3 12.5 6.7 8.7 7.2 8 39.3 31
APAT 44 14 16 31 9 5 10 15 105 38
Change (YoY %) -1.3 -69.4 -63.4 -49.5 -80.5 -65.7 -37.6 -51.7 -46.2 -63.6
Change (QoQ %) -28.3 -67.8 9.6 99.6 -72.4 -43.3 99.7 54.3

January 2024 188

 December 2023 Results Preview | Sector: Oil & Gas

Oil & Gas

Company name
Refining and marketing margins to contract QoQ
Aegis Logistics
BPCL CGD margins to remain broadly flat for all players, except for MAHGL
Castrol India  Brent crude prices averaged USD83.7/bbl in 3QFY24, down 3.4% QoQ, as demand
GAIL concerns continued to overshadow the impact of supply cuts by OPEC+. However, we
Gujarat Gas expect Brent prices to remain at USD85/bbl during FY25-26 as global oil and oil
Gujarat State Petronet product inventories stand at the lower end of the last five-year average and as
HPCL production cuts by OPEC+ are expected to continue through CY24.
Indraprastha Gas  We expect our coverage universe to report: a) sales decline of 6.1% YoY (up 3.9% YoY
IOCL excluding OMCs), b) EBITDA growth of 16.3% YoY (up 11.5% YoY excluding OMCs), and
Mahanagar Gas c) PAT growth of 20.9% YoY (up 8.9% YoY excluding OMCs). The YoY PAT growth would
MRPL be largely driven by GAIL and OMCs.
Oil India  RIL – EBITDA to remain muted on sequential basis: We expect consolidated EBITDA of
ONGC INR411b (up 17% YoY/flat QoQ). We estimate EBITDA of INR190b (up 26% YoY/down
Petronet LNG 1% QoQ) for the standalone business, INR134b (up 11% YoY/3% QoQ) for RJio, and
Reliance Industries INR52b (up 31% YoY/7% QoQ) for the Retail business.
 OMCs: SG GRM declined to USD5.6/bbl in 3QFY24 (from USD9.5/bbl in 2QFY24), with
Naphtha and LPG cracks improving to –USD11.7/bbl and –USD25.3/bbl, respectively,
while all other cracks declined QoQ. Blended marketing margins for IOCL/BPCL/HPCL
are expected to decline to INR3.1/INR3.2/INR3.4 per liter in 3QFY24, primarily due to
lower LPG margins during the quarter. We have a BUY rating on IOCL and Neutral
rating on BPCL and HPCL.

Brent crude prices decline QoQ amid demand concerns

 Brent crude prices averaged USD83.7/bbl in 3QFY24, down 3.4% QoQ, as
subdued demand (particularly from China) continued to overshadow the impact
of production cuts by OPEC+.
 OPEC+ nations have been cutting production since last year to maintain stability
in the global oil markets. Meanwhile, the US and other western countries have
called for lower oil prices to support economic growth.
 We assume Brent prices at USD85/bbl during FY25-26 as global oil and oil
product inventories stand at the lower end of the last five-year average and as
production cut by OPEC+ are expected to continue through CY24.
SG GRM contracts sequentially to USD5.6/bbl
 SG GRM contracted 11.7% QoQ to USD5.6/bbl in 3QFY24, due to a decline in all
cracks, except LPG and Naphtha. We expect IOCL/BPCL/HPCL to report GRMs at
USD10.2/USD11.7/USD8.5 per barrel (after inventory loss) in 3QFY24.
 Gasoline crack contracted 43.6% QoQ, while diesel crack declined 16.6%. ATF crack
fell 7.9% QoQ to USD23.9/bbl in 3QFY24. FO crack declined to -USD10.6/bbl in
3QFY24 from -USD5/bbl in 1QFY24. LPG crack improved to -USD25.3/bbl.
 Refineries are expected to witness an increase in overall throughput QoQ,
except for HPCL, which is expected to see a 6% QoQ drop. The throughput is
expected to increase 1% for IOCL and 2% for BPCL. MRPL’s refining throughput
is likely to increase 33% QoQ.

Abhishek Nigam – Research Analyst (Abhishek.Nigam@MotilalOswal.com)

JanuaryAnalyst:
Research 2024 Aman Chowdhary (Aman.Chowdhary@MotilalOswal.com) | Rohit Thorat (Rohit.Thorat@MotilalOswal.com) 189
 December 2023 Results Preview | Sector: Oil & Gas

Petchem margins continue to decline in 3QFY24

 Petchem prices declined 3% QoQ and 4% YoY in 3QFY24. PE/PP prices were flat
QoQ but declined 6%/2% YoY. PVC prices were down 8% QoQ/5% YoY.
 Petchem margins declined 15% QoQ/14% YoY. PE/PP/PVC spreads declined
5%/5%/36% QoQ and 15%/7%/20% YoY.
Margin to remain flat sequentially for CGDs
 For GUJGA and IGL, volumes are expected to rise 2% QoQ, while MAHGL volumes
are likely to rise 1% QoQ. EBITDA/scm is likely to remain broadly flat for IGL and
GUJGA in 3QFY24 as price hikes offset the impact of high LNG costs. For MAHGL,
margins may fall 7% QoQ due to price cuts by the company and high LNG prices.
 The focus would be on volumes for CGDs, particularly GUJGA, which is trying to
push for industrial gas usage in Thane rural, Ahmedabad rural, and new areas in
Rajasthan. A pickup in Morbi volumes will be a key factor to watch out for.
 In terms of volume growth, IGL is facing multiple headwinds, e.g., 1) stagnation
in I/C volume growth amid competition from alternate fuels, 2) stagnant growth
from D-Haryana segment over past few quarters, and 3) margins likely peaking
out in FY24. As a result, we remain cautious on IGL in the long term.
Our key assumptions
 We assume crude prices at USD85/bbl from 4QFY24 onward. Average crude
prices for 3QFY24 stood at USD83.7/bbl (vs. USD86.7/bbl in 2QFY24 and
USD88.6/bbl in 3QFY23).
 We expect the regional benchmark SG GRM to stabilize at ~USD6/bbl (its long-
term average) in the medium to long term. Gas realization for OINL and ONGC
stands at USD6.5/mmBtu till FY25 end and would increase to USD7/mmBtu in
FY26, led by an increase in APM price and premium pricing for gas produced
from well intervention.

Exhibit 1: Oil & gas product prices, cracks, and margins (USD/bbl)
(USD/bbl) 3QFY23 4QFY23 1QFY24 2QFY24 3QFY24 YoY (%) QoQ (%)
Oil
WTI 82.9 76.1 73.8 82.5 78.4 -5.4 -5.0
Brent 88.6 81.2 78.4 86.7 83.7 -5.5 -3.4
Dubai 84.8 80.3 77.8 86.7 83.4 -1.7 -3.8
Arab Light-Heavy 3.8 4.1 1.8 2.1 2.1 -44.9 -1.6
Gas
Henry Hub (USD/mmBtu) 5.5 2.7 2.2 2.6 2.7 -50.1 5.7
Oil to Gas 16.1 31.3 36.3 33.4 30.6 89.3 -8.6
Exchange Rate (INR/USD) 82.2 82.3 82.2 82.7 52.0 -36.8 -37.1
Product Cracks (v/s Dubai)
LPG -28.8 -23.3 -32.8 -31.8 -25.3 Loss Loss
Gasoline 5.4 14.8 12.3 12.8 7.2 33.3 -43.6
Diesel 32.7 20.8 8.1 20.4 17.0 -48.0 -16.6
Jet/Kero 33.8 26.6 14.3 26.0 23.9 -29.2 -7.9
Naphtha -11.6 -4.8 -12.8 -16.4 -11.7 Loss Loss
Fuel Oil -22.1 -16.0 -8.3 -5.0 -10.6 Loss Loss
SGRM 6.3 8.2 4.0 9.5 5.6 -11.7 -41.5
Source: Company, MOFSL

January 2024 190

 December 2023 Results Preview | Sector: Oil & Gas

Exhibit 2: Summary of expected quarterly performance

SALES (INR M) EBDITA (INR M) NET PROFIT (INR M)
CMP
RECO Var Var Var Var Var Var
Sector (INR) Dec-23 Dec-23 Dec-23
% YoY % QoQ % YoY % QoQ % YoY % QoQ
Aegis Logistics 349 Neutral 18,347 -12.1 48.6 2,191 1.4 5.2 1,309 4.4 3.1
BPCL 452 Neutral 10,03,541 -15.8 -2.6 63,227 44.5 -51.4 32,668 66.7 -61.6
Castrol India 191 Buy 12,592 7.1 6.4 2,965 18.3 10.4 2,163 11.9 11.2
GAIL 166 Buy 3,54,012 0.1 11.2 34,728 1,228.9 -0.5 24,176 883.8 0.5
Gujarat Gas 484 Buy 40,542 10.0 5.4 5,082 -12.7 2.3 3,028 -18.4 1.7
Gujarat State Petronet 320 Buy 4,438 27.4 -2.1 3,749 38.9 -8.6 2,563 49.9 -51.8
HPCL 400 Neutral 9,55,678 -12.8 -0.1 31,357 51.1 -61.4 12,211 608.2 -76.1
Indraprastha Gas 421 Sell 33,626 -9.4 -2.8 6,650 55.2 1.2 4,576 64.5 -14.4
IOC 130 Buy 17,59,669 -14.1 -2.1 72,570 37.1 -66.0 23,832 432.0 -81.6
Mahanagar Gas 1204 Buy 15,366 -8.1 -2.2 4,488 75.2 -6.3 3,150 83.1 -6.9
MRPL 133 Neutral 2,34,313 -11.8 21.8 16,592 209.7 -26.0 7,272 LP -31.4
Oil India 378 Buy 60,280 2.5 1.9 22,964 -19.6 -7.7 14,659 -16.0 -23.2
ONGC 205 Buy 3,49,919 -9.3 -0.5 1,79,026 -12.3 -2.5 91,471 -17.2 -10.5
Petronet LNG 226 Neutral 1,32,295 -16.1 5.6 12,546 -25.1 3.3 8,240 -30.2 0.7
Reliance Inds. 2590 Buy 24,01,749 10.6 3.6 4,11,051 16.6 0.3 1,76,294 11.6 1.4
Oil & Gas 73,76,366 -6.1 1.5 8,69,187 16.3 -23.6 4,07,613 20.9 -34.7
Oil Ex OMCs 36,57,477 3.9 5.0 7,02,032 11.5 -1.5 3,38,902 8.9 -5.4

Exhibit 3: Relative performance – three-months (%) Exhibit 4: One-year relative performance (%)
Nifty Index MOFSL Oil & Gas Index Nifty Index MOFSL Oil & Gas Index
118 130

111 115

104 100

97 85

90 70
Sep-23 Oct-23 Nov-23 Dec-23 Dec-22 Mar-23 Jun-23 Sep-23 Dec-23
Sources: Bloomberg, MOFSL Sources: Bloomberg, MOFSL

January 2024 191

 December 2023 Results Preview | Sector: Oil & Gas

SG GRM contracts in 3QFY24; petchem margins continue to fall

Exhibit 5: Brent crude price down 6% YoY and 3% QoQ Exhibit 6: Brent premium to WTI increased to USD5.4/bbl
Brent Crude Price (USD/bbl) Brent less WTI (USD/bbl)
120 12
88.6 83.7
90 9
5.8 5.4
60 6

30 3

0 0
2QFY18

1QFY19

4QFY19

3QFY20

2QFY21

1QFY22

3QFY18

3QFY19
1QFY18
3QFY18
4QFY18
2QFY19
3QFY19
1QFY20
2QFY20
4QFY20
1QFY21
3QFY21
4QFY21
2QFY22
3QFY22
4QFY22
1QFY23
2QFY23
3QFY23
4QFY23
1QFY24
2QFY24
3QFY24

1QFY18
2QFY18
4QFY18
1QFY19
2QFY19
4QFY19
1QFY20
2QFY20
3QFY20
4QFY20
1QFY21
2QFY21
3QFY21
4QFY21
1QFY22
2QFY22
3QFY22
4QFY22
1QFY23
2QFY23
3QFY23
4QFY23
1QFY24
2QFY24
3QFY24
Source: Reuters, MOFSL Source: Reuters, MOFSL

Exhibit 7: Reuters SG GRM (average) declined QoQ to Exhibit 8: Naphtha and LPG crack improved during the
USD5.6/bbl (from USD9.5/bbl in 2QFY24) quarter, others declined (USD/bbl)
Reuters Singapore GRM (USD/bbl) 3QFY23 4QFY23 1QFY24 2QFY24 3QFY24
24

23.9
35

17.0
16
20
7.2

6.3 5.6
8
5
0 (10)

(10.6)
(11.7)

(8) (25)
(25.3)
4QFY20

4QFY21

4QFY22
1QFY18
2QFY18
3QFY18
4QFY18
1QFY19
2QFY19
3QFY19
4QFY19
1QFY20
2QFY20
3QFY20
1QFY21
2QFY21
3QFY21
1QFY22
2QFY22
3QFY22
1QFY23
2QFY23
3QFY23
4QFY23
1QFY24
2QFY24
3QFY24

(40)
Gasoline Naphtha LPG Diesel Jet/Kero Fuel Oil

Source: Reuters, MOFSL Source: Reuters, MOFSL

Exhibit 9: Crude differential was flat QoQ at USD2.1/bbl for Exhibit 10: Spreads over Naphtha for PE, PP, and PVC
Arab L-H and expanded to USD0.3/bbl for Brent-Dubai declined QoQ
In USD/bbl Brent - Dubai Arab L-H USD/MT PE PP PVC
8 1000
6 800

4 600
2.1
2 400
0.3
0 200

(2) 0
1QFY21

1QFY24
3QFY20
4QFY20

2QFY21
3QFY21
4QFY21
1QFY22
2QFY22
3QFY22
4QFY22
1QFY23
2QFY23
3QFY23
4QFY23

2QFY24
3QFY24
1QFY19

2QFY21

4QFY23
1QFY18
2QFY18
3QFY18
4QFY18
2QFY19
3QFY19
4QFY19
1QFY20
2QFY20
3QFY20
4QFY20
1QFY21
3QFY21
4QFY21
1QFY22
2QFY22
3QFY22
4QFY22
1QFY23
2QFY23
3QFY23
1QFY24
2QFY24
3QFY24

Source: Reuters, MOFSL Source: Bloomberg, MOFSL

January 2024 192

 December 2023 Results Preview | Sector: Oil & Gas

Exhibit 11: Expect realization (before windfall tax) of Exhibit 12: Expect LNG imports (mmt) to increase 4% QoQ
USD82/bbl for ONGC in 3QFY24 and 8% YoY in 3QFY24
Realization (before windfall tax) LNG imports (mmt)

109
96
95

87

85
82
77
76
76
69
66

5.5

4.9
6.2
7.0

6.6
6.8
6.1
6.3
6.3
5.8
5.1
5.5
4.8

5.1
5.0
5.1
5.3
58
43
41
29

1QFY21

3QFY23
3QFY20
4QFY20

2QFY21
3QFY21
4QFY21
1QFY22
2QFY22
3QFY22
4QFY22
1QFY23
2QFY23

4QFY23
1QFY24
2QFY24E
3QFY24E*
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q
FY21 FY22 FY23 FY24

2
Source: Company, MOFSL *Sep’23 data extrapolated for 2QFY24E Source: PPAC, MOFSL
Exhibit 13: GRM snapshot for OMCs (USD/bbl)
IOCL reported GRM BPCL reported GRM HPCL Reported GRM SG GRM

31.8
27.5
16.7

20.6
18.5

18.5
17.9
19.2
21.2

16.8

15.9
15.3

15.3

14.1

13.3
12.6
12.5
12.0

12.9

11.7
10.6

10.2
9.7
6.1
9.6

9.1
4.1

9.5
8.6

8.5
8.3
3.2

8.2

7.4
8.0

8.3
6.6

6.6

6.6

1.2
6.4

7.1
0.4

2.5
5.8

6.2 5.6
1.5
4.1

6.0
3.5

3.3

4.0
2.7

2.4
2.2

1.6
0.8

(0.9) 0.1 1.2 1.8 2.0 3.8

(0.9)

(1.0)
(2.0)

4QFY21

1QFY22

2QFY24

3QFY24E
3QFY20

4QFY20

1QFY21

2QFY21

3QFY21

2QFY22

3QFY22

4QFY22

1QFY23

2QFY23

3QFY23

4QFY23

1QFY24
Source: Company, MOFSL
Exhibit 14: EBITDA/scm snapshot for CGDs (INR)
GUJGA IGL MAHGL

16.8
EBITDA/scm

14.6
13.9

13.5
12.8
12.4

12.1
11.6

10.5
10.3

7.9

8.7
9.1
9.9

9.6

7.6
9.2

9.2

8.2
7.9

8.7 8.0 7.9 8.6 8.6 8.6 8.5

8.0
7.0

6.7 7.2
6.3 6.5 6.4 6.6
3.4 8.0
8.1

7.9

7.8
3.4

7.1
6.8

5.7 6.3
5.8

5.8
5.8
5.6

5.1
4.7

4.6
4.9

4.0
4.3

2.3
4.3

3QFY24E
2QFY22

3QFY22
1QFY20

2QFY20

3QFY20

4QFY20

1QFY21

2QFY21

3QFY21

4QFY21

1QFY22

4QFY22

1QFY23

2QFY23

3QFY23

4QFY23

1QFY24

2QFY24

Source: Company, MOFSL

January 2024 193

 December 2023 Results Preview | Sector: Oil & Gas

Exhibit 15: Volume snapshot for CGDs (mmscmd)

Volumes mmscmd GUJGA IGL MAHGL

11.4 12.1 11.4 11.4 9.2

9.3 9.3 9.9 9.8 10.0 9.9 9.8 9.3 9.5
9.2 8.9
7.6 7.3
7.9 8.2
4.1 8.1 8.1 8.3 8.3 8.5
6.3 6.6 6.7 6.2 6.8 7.2 7.7 7.7
5.5 6.3 5.3
3.0 3.0 3.1 2.8 2.7 3.4 3.4 3.6 3.6
2.1 2.8 2.9 2.4 3.1 3.3 3.2 3.5 3.4 3.4
1.1
2QFY20

4QFY20
1QFY20

3QFY20

1QFY21

2QFY21

3QFY21

4QFY21

1QFY22

2QFY22

3QFY22

4QFY22

1QFY23

2QFY23

3QFY23

4QFY23

1QFY24

2QFY24

3QFY24E
Source: Company, MOFSL

Exhibit 16: Valuation summary

CMP EPS (INR) PE (x) PB (x) ROE (%)
Company Name INR Reco FY24E FY25E FY26E FY24E FY25E FY26E FY24E FY25E FY26E FY24E FY25E FY26E
Oil & Gas 11.5 12.5 11.3 1.6 1.5 1.4 14.3 12.0 12.1
Aegis Logistics 349 Neutral 14.5 15.7 16.6 24.2 22.3 21.1 3.2 2.9 2.7 13.7 13.6 13.2
BPCL 452 Neutral 128.1 76.4 76.6 3.5 5.9 5.9 1.4 1.2 1.1 44.3 22.2 19.9
Castrol India 191 Buy 8.5 8.6 10.0 22.6 22.2 19.2 9.2 8.4 7.7 42.5 39.6 42.1
GAIL 166 Buy 12.7 12.7 16.3 13.1 13.1 10.2 1.6 1.5 1.4 14.2 13.0 15.0
Gujarat Gas 484 Buy 15.8 18.7 21.2 30.6 25.9 22.9 4.3 3.8 3.4 14.7 15.7 15.9
Gujarat State Petronet 320 Buy 22.8 19.0 19.7 14.1 16.9 16.2 1.8 1.7 1.5 13.2 10.1 9.8
HPCL 400 Neutral 111.6 80.8 78.7 3.6 4.9 5.1 1.3 1.1 0.9 41.7 24.0 19.9
Indraprastha Gas 421 Sell 27.1 25.9 25.9 15.5 16.3 16.2 3.5 3.0 2.7 24.4 20.0 17.6
IOC 130 Buy 28.6 16.3 15.6 4.6 8.0 8.4 1.1 1.0 0.9 26.1 13.3 11.8
Mahanagar Gas 1,204 Buy 133.7 109.6 114.9 9.0 11.0 10.5 2.4 2.1 1.9 29.2 20.6 19.2
MRPL 133 Neutral 19.8 15.2 14.0 6.7 8.7 9.5 1.9 1.6 1.4 31.0 19.7 15.8
Oil India 378 Buy 59.4 61.6 68.0 6.4 6.1 5.6 1.1 1.0 0.9 19.8 16.4 16.4
ONGC 205 Buy 42.7 45.0 50.9 4.8 4.6 4.0 0.8 0.8 0.7 18.4 17.4 17.7
Petronet LNG 226 Neutral 23.0 20.2 21.6 9.8 11.2 10.5 2.0 1.8 1.7 21.7 17.2 16.8
Reliance Inds. 2,590 Buy 102.4 120.9 138.5 25.3 21.4 18.7 1.9 1.7 1.6 8.1 8.9 9.3

January 2024 194

 December 2023 Results Preview | Sector: Oil & Gas

The tables below provide a snapshot of actual and estimated numbers for companies under the MOFSL coverage
universe. Highlighted columns indicate the quarter/financial year under review.

Aegis Logistics Neutral

CMP: INR349 | TP: INR345 (-1%) EPS CHANGE (%): FY24|25: +13|+8
 Expect EBITDA to be at INR2.2b due to an increase in India’s  Recovery in sourcing volume will be a key monitorable
LPG imports.
 Watch out for commentary on competition from natural gas  Watch out for updates on LPG terminal capacity in
in industrial volumes. Mangalore and liquid capacity expansion in Kochi
Consolidated - Quarterly Earning Model (INR m)
Y/E March FY23 FY24
FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
Net Sales 22,355 21,505 20,867 21,545 21,005 12,349 18,347 19,042 86,272 70,742
YoY Change (%) 229.7 238.5 71.9 2.4 -6.0 -42.6 -12.1 -11.6 86.3 -18.0
EBITDA 1,466 1,686 2,161 2,026 1,959 2,083 2,191 2,164 7,339 8,397
Margin (%) 6.6 7.8 10.4 9.4 9.3 16.9 11.9 11.4 8.5 11.9
Depreciation 289 334 344 292 333 341 351 364 1,258 1,389
Interest 103 254 272 254 298 266 249 183 882 995
Other Income 861 180 192 637 374 444 389 349 1,870 1,556
PBT before EO expense 1,935 1,279 1,738 2,117 1,702 1,920 1,980 1,967 7,068 7,569
Extra-Ord expense 621 0 0 0 0 0 0 0 621 0
PBT 1,314 1,279 1,738 2,117 1,702 1,920 1,980 1,967 6,448 7,569
Tax 240 268 309 524 375 420 498 485 1,341 1,779
Rate (%) 18.2 21.0 17.8 24.7 22.0 21.9 25.2 24.7 20.8 23.5
MI & P/L of Asso. Cos. 41 77 175 185 169 230 173 144 477 716
Reported PAT 1,034 934 1,253 1,409 1,158 1,270 1,309 1,337 4,630 5,074
YoY Change (%) 131.4 -1.1 23.2 48.7 -24.9 36.0 4.4 -5.1 43.7 -1.2
Margin (%) 6.9 4.3 6.0 6.5 5.5 10.3 7.1 7.0 6.0 7.2

BPCL Neutral
CMP: INR452 | TP: INR475 (+5%) EPS CHANGE (%): FY24|25: +7|+62
 Expect refinery throughput at 9.5mmt (up 1% YoY/up 2%  Expect reported GRM at USD11.7/bbl, with blended gross
QoQ). marketing margin at INR3.2/liter.
 Expect marketing sales (excluding exports) volumes of  Watch out for updates on expansion of Bina refinery and
12.8mmt (flat YoY/up 5% QoQ) during the quarter. construction of new petrochemicals plant.
Standalone - Quarterly earnings model (INR b)
Y/E March FY23 FY24
FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
Net Sales 1,210.5 1,148.1 1,191.6 1,181.1 1,129.8 1,029.9 1,003.5 1,039.5 4,731.2 4,251.5
YoY Change (%) 70.7 50.3 25.3 13.3 -6.7 -10.3 -15.8 -12.0 36.5 -10.1
EBITDA -49.0 20.2 43.8 111.5 158.1 130.1 63.2 65.1 126.5 263.1
Margins (%) -4.0 1.8 3.7 9.4 14.0 12.6 6.3 6.3 2.7 6.2
Depreciation 16.1 15.6 15.8 16.0 16.1 16.0 16.5 16.6 63.5 72.3
Interest 6.2 8.1 9.8 8.1 6.8 7.7 8.4 10.7 32.2 22.1
Other Income 4.4 5.6 4.5 5.4 4.7 7.7 5.7 4.6 19.9 27.5
PBT before EO expense -76.5 -3.8 21.3 94.8 140.1 113.1 43.7 42.4 35.8 195.1
Extra-Ord expense 0.0 0.0 0.0 13.6 0.0 0.0 0.0 0.0 13.6 0.0
PBT -76.5 -3.8 21.3 81.2 140.1 113.1 43.7 42.4 22.2 195.1
Adj PAT -62.6 -3.0 19.6 75.6 105.5 85.0 32.7 31.7 29.6 254.9
YoY Change (%) PL PL -30.7 202.4 LP LP 66.7 -58.1 -70.3 762.5
Key Assumptions
Refining throughput (mmt) 9.7 8.8 9.4 10.6 10.4 9.4 9.5 10.0 38.5 39.2
Reported GRM (USD/bbl) 27.5 16.8 15.9 20.6 12.6 18.5 11.7 9.0 20.3 12.8
Marketing sales volume excld exports (mmt) 11.8 11.4 12.8 12.9 12.8 12.2 12.8 13.4 48.9 51.2
Marketing GM incld inv (INR/litre) -9.1 -0.6 1.1 2.9 9.3 5.9 3.2 4.1 -1.4 5.6

January 2024 195

 December 2023 Results Preview | Sector: Oil & Gas

Castrol (India) Buy

CMP: INR191 | TP: INR220 (+15%) EPS CHANGE (%): CY23|24: +3|-3
 Forecast volumes at 54.4m liters (up 13% YoY/7% QoQ)  Expect realization of ~INR231.4/liter (flat QoQ/down 3%
during the quarter YoY) during the quarter.
 EBITDA margin to increase 220bp YoY, led by low input costs. Raw material volatility, product launches, and OEM tie-ups
remain the key monitorables.
Quarterly Performance (INR m)
Y/E December CY22 CY23
CY22 CY23E
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4QE
Volume (m litres) 59.0 56.0 47.0 48.0 55.0 58.0 51.0 54.4 210.0 218.4
Realization 209 222 239 245 235 230 232 231 227 232
Net Sales 12,357 12,417 11,211 11,760 12,939 13,338 11,829 12,592 47,745 50,697
YoY Change (%) 8.5 39.6 4.5 7.8 4.7 7.4 5.5 7.1 13.9 6.2
EBITDA 3,172 2,861 2,571 2,506 2,950 3,098 2,686 2,965 11,111 11,699
YoY Change (%) -6.7 44.9 -2.0 -5.7 -7.0 8.3 4.4 18.3 4.2 5.3
Margin (%) 25.7 23.0 22.9 21.3 22.8 23.2 22.7 23.5 23.3 23.1
Depreciation 202 196 208 208 227 218 229 234 814 909
Interest 7 5 12 16 17 15 24 25 40 80
Other Income 150 137 187 196 176 186 202 228 670 792
PBT before EO expense 3,113 2,797 2,538 2,479 2,883 3,050 2,635 2,934 10,928 11,502
PBT 3,113 2,797 2,538 2,479 2,883 3,050 2,635 2,934 10,928 11,502
Tax 829 735 667 546 858 797 691 771 2,776 3,117
Rate (%) 26.6 26.3 26.3 22.0 29.8 26.1 26.2 26.3 25.4 27.1
PAT 2,284 2,063 1,872 1,933 2,025 2,253 1,944 2,163 8,152 8,385
YoY Change (%) -6.2 47.3 0.7 2.5 -11.3 9.2 3.9 11.9 7.5 2.9
Operational Details (INR/lit)
Volume (m litres) 59.0 56.0 47.0 48.0 55.0 58.0 51.0 54.4 210.0 218.4
Realization 209.4 221.7 238.5 245.0 235.3 230.0 231.9 231.4 227.4 232.1
Gross margin 105.1 109.5 108.4 110.9 110.7 108.5 109.2 110.0 108.3 109.6
EBITDA 53.8 51.1 54.7 52.2 53.6 53.4 52.7 54.5 52.9 53.6
PAT 38.7 36.8 39.8 40.3 36.8 38.8 38.1 39.8 38.8 38.4

GAIL Buy
CMP: INR166 | TP: INR195 (+17%) EPS CHANGE (%): FY24|25: +11|-4
 Expect transmission volumes of 122.8mmscmd (up 18%  Keep an eye on the progress of GAIL Mangalore
YoY/2% QoQ); robust volumes guidance by year end Petrochemicals Ltd plant
 Expect petchem volumes of 169.4kmt, with segmental EBIT  Updates on progress of ongoing pipeline projects remains a
still making losses for 6th consecutive quarter key monitorable.
Quarterly Performance (INR m)
Y/E March FY23 FY24
FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
Net Sales 3,75,721 3,84,909 3,53,804 3,28,582 3,22,275 3,18,226 3,54,012 3,44,786 14,43,016 13,39,299
Change (%) 116.1 78.9 37.3 21.8 -14.2 -17.3 0.1 4.9 57.5 -7.2
EBITDA 43,657 17,647 2,613 3,072 24,327 34,913 34,728 26,204 66,989 1,20,171
% of Net Sales 11.6 4.6 0.7 0.9 7.5 11.0 9.8 7.6 4.6 9.0
Depreciation 6,030 6,194 6,226 6,432 6,358 7,503 6,858 7,669 24,881 28,388
Interest 481 683 1,050 903 1,758 1,718 1,523 1,153 3,117 6,153
Other Income 1,798 7,988 6,889 10,172 2,676 5,609 5,992 10,690 26,847 24,968
PBT 38,944 18,759 2,227 5,909 18,887 31,301 32,339 28,071 65,838 1,10,598
Tax 9,792 3,388 -231 -127 4,767 7,252 8,163 6,969 12,823 27,152
Rate (%) 25.1 18.1 -10.4 -2.1 25.2 23.2 25.2 24.8 19.5 24.6
PAT 29,152 15,371 2,457 6,035 14,120 24,049 24,176 21,102 53,015 83,446
Change (%) 90.5 -46.3 -92.5 -77.5 -51.6 56.5 883.8 249.6 -48.8 57.4
Extraord.: Tax Prov. Write Back 0 0 0 0 0 0 0 0 0 0
Adj PAT 29,152 15,371 2,457 6,035 14,120 24,049 24,176 21,102 53,015 83,446
Change (%) 90.5 -46.3 -92.5 -76.8 -51.6 56.5 883.8 249.6 -48.5 57.4
Key Assumptions
Gas Trans. volume (mmscmd) 109.5 107.7 103.7 108.2 116.3 120.3 122.8 126.9 107.3 121.6
Petchem sales ('000MT) 109.0 108.0 65.0 118.0 162.0 168.0 169.4 164.8 400.0 664.2

January 2024 196

 December 2023 Results Preview | Sector: Oil & Gas

Gujarat Gas Buy

CMP: INR484 | TP: INR575 (+19%) EPS CHANGE (%): FY24|25: +3|+0
 Expect volumes at 9.5mmscmd (up 31% YoY/2% QoQ)  Pickup in volumes at Morbi is a key monitorable
with pickup in PNG I/C segment
 Expect EBITDA/scm to remain flat QoQ INR5.8/scm as  Push for industrial gas usage in Thane rural, Ahmedabad
price hikes offset impact of high LNG cost rural and new areas in Rajasthan would be key for growth
Standalone - Quarterly Earning Model (INR m)
Y/E March FY23 FY24
FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
Net Sales 51,701 39,765 36,843 39,286 37,815 38,454 40,542 40,661 1,67,594 1,57,472
YoY Change (%) 71.7 9.7 -28.4 -15.9 -26.9 -3.3 10.0 3.5 1.8 -6.0
EBITDA 6,066 6,427 5,823 5,603 3,880 4,966 5,082 4,623 23,920 18,551
Margin (%) 11.7 16.2 15.8 14.3 10.3 12.9 12.5 11.4 14.3 11.8
Depreciation 1,032 1,064 1,093 1,094 1,151 1,179 1,216 1,241 4,283 4,787
Interest 136 131 76 61 74 78 76 77 404 305
Other Income 190 185 320 318 239 298 259 275 1,013 1,070
PBT 5,089 5,418 4,974 4,766 2,894 4,007 4,049 3,580 20,247 14,530
Tax 1,278 1,379 1,261 1,074 743 1,029 1,020 865 4,992 3,657
Rate (%) 25.1 25.4 25.4 22.5 25.7 25.7 25.2 24.2 24.7 25.2
Reported PAT 3,811 4,039 3,713 3,692 2,151 2,978 3,028 2,715 15,255 10,873
Adj. PAT 3,811 4,039 3,713 3,692 2,151 2,978 3,028 2,715 15,255 10,873
YoY Change (%) -20.0 64.6 204.5 -18.5 -43.6 -26.3 -18.4 -26.5 17.8 -28.7
Total volume (mmscmd) 9.8 7.6 7.3 8.9 9.2 9.3 9.5 9.7 8.4 9.4
CNG 2.4 2.3 2.4 2.5 2.6 2.6 2.7 2.8 2.4 2.7
PNG – Industrial/Commercial 6.8 4.6 4.2 5.5 6.0 6.0 6.1 6.1 5.3 6.0
PNG – Households 0.6 0.7 0.7 0.8 0.6 0.7 0.8 0.8 0.7 0.7
EBITDA (INR/scm) 6.8 9.2 8.7 7.0 4.6 5.8 5.8 5.2 7.9 5.4

Gujarat State Petronet Buy

CMP: INR320 | TP: INR400 (+25%) EPS CHANGE (%): FY24|25: 0|-1
 Expect transmission volumes of 30.2mmscmd (up 23%  Commissioning of Phase-II Mehsana-Bhatinda pipeline and
YoY/ 3% QoQ) further expansion/debottlenecking of three pipelines
connecting three LNG terminals remain key monitorable.
 EBITDA/mscm expected to decline 13% QoQ, due to  Keep an eye on proposed capex for HP gas grid that would
higher employee expenses. facilitate gas transportation from newer LNG terminals.
Standalone - Quarterly Earning Model (INR m)
Y/E March FY23 FY24 FY23 FY24E FY24 Var. vs
1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE 3QE est.
Net Sales 4,200 3,850 3,484 3,740 3,937 4,533 4,438 4,616 15,275 17,523 4,438 0%
YoY Change (%) -4.5 -13.9 -12.7 0.3 -6.3 17.7 27.4 23.4 -7.9 14.7 27.4
EBITDA 3,602 3,338 2,699 2,947 3,364 4,103 3,749 3,921 12,587 15,136 3,749 0%
YoY Change (%) -3.8 -12.3 -19.8 -3.7 -6.6 22.9 38.9 33.0 -9.9 20.3 38.9
Margin (%) 85.8 86.7 77.5 78.8 85.5 90.5 84.5 84.9 82.4 86.4 84.5
Depreciation 479 488 489 483 468 477 498 510 1,939 1,953 498
Interest 14 11 11 10 10 10 10 9 47 40 10
Other Income 40 1,037 130 476 180 2,663 184 188 1,684 3,215 184
PBT before EO expense 3,149 3,877 2,329 2,931 3,066 6,278 3,424 3,589 12,286 16,359 3,424 0%
Extra-Ord expense 0 0 0 0 0 0 0 0 0 0 0
PBT 3,149 3,877 2,329 2,931 3,066 6,278 3,424 3,589 12,286 16,359 3,424 0%
Tax 794 735 620 687 773 958 862 905 2,836 3,524 862
Rate (%) 25.2 18.9 26.6 23.5 25.2 15.3 25.2 25.2 23.1 21.5 25.2
Reported PAT 2,355 3,142 1,709 2,243 2,293 5,320 2,563 2,685 9,450 12,835 2,563 0%
YoY Change (%) 1.1 -4.9 -19.9 11.0 -2.6 69.3 49.9 19.7 -3.5 35.8 49.9
Margin (%) 56.1 81.6 49.1 60.0 58.2 117.4 57.7 58.2 61.9 73.2 57.7
Key Operating Parameters
Transmission Volume (mmscmd) 29.5 24.6 22.3 25.1 29.4 30.2 31.6 32.8 25.4 31.0 31.6 0%
Implied Tariff (INR/mscm) 1,523 1,656 1,678 1,562 1,435 1,587 1,511 1,510 1,600 1,511 1,511 0%

January 2024 197

 December 2023 Results Preview | Sector: Oil & Gas

HPCL Neutral
CMP: INR400 | TP: INR450 (+12%) EPS CHANGE (%): FY24|25: -2|+46
 Expect refining throughput at 5.4mmt (up 12% YoY), led by  Expect reported GRM at USD8.5/bbl, with gross marketing
rising throughput at Visakhapatnam refinery margin at INR3.4/liter.
 Expect marketing sales volumes at 1.31mmt (flat YoY/up  Watch out for commissioning of remaining units of
5% QoQ) Visakhapatnam refinery and new Rajasthan refinery
Standalone - Quarterly Earning Model (INR b)
Y/E March FY23 FY24
FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
Net Sales 1,144.5 1,084.2 1,096.0 1,079.3 1,119.6 957.0 955.7 1,092.3 4,404.0 4,124.6
YoY Change (%) 58.0 30.5 13.5 10.6 -2.2 -11.7 -12.8 1.2 25.9 -6.3
EBITDA -115.5 -8.9 20.7 46.6 95.2 81.2 31.4 45.2 -57.1 253.0
Margins (%) -10.1 -0.8 1.9 4.3 8.5 8.5 3.3 4.1 -1.3 6.1
Depreciation 10.9 10.8 11.1 10.4 13.6 12.4 14.3 16.2 43.3 56.5
Forex loss 9.5 6.0 4.0 -1.4 -1.3 -1.0 0.3 0.0 18.1 -2.0
Interest 3.3 5.9 6.8 5.2 5.9 5.8 6.0 6.2 21.3 23.8
Other Income 3.4 2.8 2.9 11.6 6.3 3.4 5.5 8.0 20.7 23.3
PBT before EO expense -135.8 -28.9 1.7 43.9 83.3 67.4 16.3 30.9 -119.1 197.9
PBT -135.8 -28.9 1.7 43.9 83.3 67.4 16.3 30.9 -119.1 197.9
Rate (%) 24.9 24.9 -2.4 26.6 25.5 24.1 25.2 25.2 24.7 25.0
Adj PAT -102.0 -21.7 1.7 32.2 62.0 51.2 12.2 23.1 -89.7 148.5
YoY Change (%) PL PL -80.2 79.5 LP LP 608.2 -28.4 PL LP
Key Assumptions
Refining throughput (mmt) 4.8 4.5 4.8 5.0 5.4 5.8 5.4 6.0 19.1 22.5
Reported GRM (USD/bbl) 16.7 8.3 9.1 14.1 7.4 13.3 8.5 9.0 12.0 9.6
Marketing sales volume incl exports (mmt) 10.7 10.4 11.3 11.1 11.9 10.7 11.3 12.6 43.5 46.5
Marketing GM incl inv (INR/litre) -9.9 0.7 2.2 3.7 8.4 5.9 3.4 4.3 -0.8 5.5

Indraprastha Gas Sell

CMP: INR421 | TP: INR350 (-17%) EPS CHANGE (%): FY24|25: +5|+0
 Key monitorable would be increase in sales volumes from
 Expect total volumes at 8.5mmscmd (up 5% YoY/2% QoQ).
GAs – both existing and the newly awarded ones.
 Slowing D-PNG growth and increasing competition from
 Expect EBITDA/scm to remain flat QoQ at INR8.5, as price
alternate fuels in I/C segment to be the key risk to long-
hike offsets increased spot LNG prices.
term volume growth prospects.
Quarterly performance (INR m)
Y/E March FY23 FY24
FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
Net Sales 31,939 35,540 37,108 36,872 34,070 34,585 33,626 32,780 1,41,459 1,35,061
Change (%) 154.0 94.1 67.5 53.3 6.7 -2.7 -9.4 -11.1 83.5 -4.5
EBITDA 6,175 5,275 4,285 4,663 6,424 6,569 6,650 6,535 20,398 26,179
EBITDA (INR/scm) 8.6 7.1 5.7 6.3 8.6 8.6 8.5 8.1 6.9 8.5
Change (%) 62.1 -0.5 -8.8 -6.8 4.0 24.5 55.2 40.2 8.4 28.3
Depreciation 857 914 925 938 989 1,022 1,047 1,128 3,634 4,186
Interest 24 31 26 26 24 25 25 27 106 101
Other Income 307 1,100 557 654 457 1,340 537 530 2,619 2,863
PBT before EO 5,602 5,430 3,891 4,354 5,867 6,862 6,115 5,910 19,277 24,755
Tax 1,394 1,269 1,109 1,057 1,483 1,514 1,539 1,493 4,827 5,810
Rate (%) 24.9 23.4 28.5 24.3 25.3 22.1 25.2 25.3 25.0 23.5
PAT 4,209 4,162 2,783 3,298 4,384 5,348 4,576 4,417 14,450 18,945
PAT (INR/scm) 5.9 5.6 3.7 4.4 5.9 7.0 5.9 5.5 4.9 6.1
Change (%) 72.3 3.9 -9.8 -8.8 4.2 28.5 64.5 33.9 9.9 31.1
Gas volumes (mmscmd)
CNG 5.93 6.09 6.07 6.11 6.17 6.25 6.33 6.33 6.05 6.27
PNG 1.96 2.00 2.05 2.14 2.03 2.06 2.17 2.48 2.04 2.18
Total 7.89 8.09 8.12 8.26 8.20 8.30 8.50 8.81 8.09 8.45

January 2024 198

 December 2023 Results Preview | Sector: Oil & Gas

IOC Buy
CMP: INR130 | TP: INR162 (+24%) EPS CHANGE (%): FY24|25: -9|+21
 Expect refinery throughput of 18mmt (down 1% YoY/up  Expect reported GRM at USD10.2/bbl, with gross
1% QoQ) marketing margin at INR3.1/liter.
 Petchem cracks declined sequentially, which could affect  Decrease in SG GRM to negatively impact IOC the most
the company’s petchem division among peers due to its highest leverage to refining.
Standalone - Quarterly Earning Model (INR b)
Y/E March FY23 FY24
FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
Net Sales 2242.5 2074.9 2047.4 2029.9 1975.3 1797.4 1759.7 2858.0 8394.7 8390.3
YoY Change (%) 89.0 53.2 22.8 14.5 -11.9 -13.4 -14.1 40.8 40.3 -0.1
EBITDA 43.0 50.1 52.9 143.5 221.6 213.1 72.6 103.1 289.5 610.5
Margin (%) 1.9 2.4 2.6 7.1 11.2 11.9 4.1 3.6 3.4 7.3
Depreciation 28.5 29.6 31.0 29.5 31.5 32.8 33.3 35.6 118.6 133.2
Forex loss 29.4 30.5 17.0 -9.9 0.0 0.0 0.0 0.0 67.0 0.0
Interest 17.2 14.4 19.5 18.1 16.3 18.5 18.4 18.4 69.3 71.5
Other Income 6.8 22.0 17.2 16.4 6.9 9.8 10.7 13.4 62.4 40.8
PBT -25.3 -2.4 2.6 122.1 180.7 171.7 31.6 62.5 97.0 446.6
Tax -5.4 0.3 -1.9 21.6 43.2 42.0 7.7 15.3 14.6 108.3
Rate (%) 21.2 -11.5 -74.6 17.7 23.9 24.5 24.5 24.5 15.0 24.3
Adj PAT -19.9 -2.7 4.5 100.6 137.5 129.7 23.8 47.2 82.4 338.2
YoY Change (%) PL PL -92.4 67.0 LP LP 432.0 -53.1 -65.9 310.4
Margin (%) -0.9 -0.1 0.2 5.0 7.0 7.2 1.4 1.7 1.0 4.0
Key Assumptions
Refining throughput (mmt) 18.9 16.1 18.2 19.1 18.8 17.8 18.0 18.0 72.3 72.5
Reported GRM 31.8 19.2 12.9 15.3 8.3 17.9 10.2 9.0 19.8 11.4
Domestic sale of refined products (mmt) 23.0 21.6 23.2 23.0 23.3 21.9 23.2 23.9 90.7 92.3
Marketing GM incld. inv. per litre (INR/litre) -7.2 -0.7 0.7 2.7 8.7 5.8 3.1 4.1 -1.1 5.4

Mahanagar Gas Buy

CMP: INR1,204 | TP: INR1,590 (+32%) EPS CHANGE (%): FY24|25: +11|+34
 Expect a volume growth of 6% YoY (up 1% QoQ) to  Expect EBITDA margin/scm of INR13.5 (up 65% YoY/ down
3.6mmscmd with CNG volumes up 6% YoY and 2% QoQ. 7% QoQ).
 Margin could be under pressure because of higher spot  Updates on progress of recently announced biogas plant is
LNG prices and price cuts during the quarter. a key monitorable.
Standalone - Quarterly Earning Model (INR m)
Y/E March FY23 FY24
FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
Net Sales 14,548 15,627 16,714 16,105 15,378 15,709 15,366 14,483 62,993 60,937
YoY Change (%) 136.4 88.2 62.6 48.2 5.7 0.5 -8.1 -10.1 76.9 -3.3
EBITDA 2,856 2,528 2,561 3,897 5,213 4,789 4,488 4,247 11,842 18,736
EBITDA/SCM 9.1 7.9 8.2 12.8 16.8 14.6 13.5 13.5 9.5 14.6
Margins (%) 19.6 16.2 15.3 24.2 33.9 30.5 29.2 29.3 18.8 30.7
Depreciation 537 551 585 638 620 658 661 683 2,311 2,622
Interest 23 25 24 22 25 25 27 27 94 104
Other Income 200 260 323 336 390 437 410 404 1,119 1,641
PBT 2,496 2,213 2,274 3,573 4,957 4,543 4,210 3,941 10,555 17,651
Tax 644 573 553 885 1,273 1,158 1,060 952 2,655 4,443
Rate (%) 25.8 25.9 24.3 24.8 25.7 25.5 25.2 24.2 25.2 25.2
Reported PAT 1,852 1,640 1,721 2,688 3,684 3,385 3,150 2,989 7,901 13,208
YoY Change (%) -9.3 -19.7 203.0 104.0 98.9 106.4 83.1 11.2 32.3 67.2
Margins (%) 12.7 10.5 10.3 16.7 24.0 21.5 20.5 20.6 12.5 21.7
Sales Volumes (mmscmd)
CNG 2.5 2.5 2.5 2.4 2.5 2.6 2.6 2.5 2.5 2.5
PNG - Domestic 0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.5
PNG - Industrial/ Commercial 0.4 0.4 0.4 0.5 0.4 0.5 0.5 0.5 0.4 0.5
PNG - Total 0.9 0.9 0.9 1.0 0.9 1.0 1.0 1.0 0.9 1.0
Total Volumes 3.4 3.5 3.4 3.4 3.4 3.6 3.6 3.5 3.4 3.5

January 2024 199

 December 2023 Results Preview | Sector: Oil & Gas

MRPL Neutral
CMP: INR133 | TP: INR120 (-10%) EPS CHANGE (%): FY24|25: -12 |+6
 Expect refinery throughput of ~4.3mmt (down 4% YoY/ up  Expect reported GRM at USD8.3/bbl, taking inventory
33% QoQ). losses into account.
 Watch out for details regarding recently announced  Sustaining good performance is a challenge, given the
petchem expansion and retail sales growth. current highly volatile macro environment.
Standalone - Quarterly Earning Model (INR b)
Y/E March FY23 FY24
FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
Net Sales 322.9 246.1 265.6 254.0 211.7 192.3 234.3 231.6 1,088.6 870.0
YoY Change (%) 185.8 85.0 30.1 2.4 -34.4 -21.9 -11.8 -8.8 56.1 -20.1
EBITDA 54.4 -15.3 5.4 33.9 20.6 22.4 16.6 14.9 78.3 74.6
Margin (%) 16.8 -6.2 2.0 13.4 9.7 11.7 7.1 6.4 7.2 8.6
Depreciation 3.0 3.0 3.0 3.0 2.9 3.0 3.2 3.2 11.9 12.3
Forex loss 7.2 4.6 2.5 -1.0 -0.1 1.0 0.3 0.0 13.4 1.3
Interest 3.0 3.2 3.4 3.3 2.7 3.1 2.7 2.2 12.9 10.7
Other Income 0.4 0.3 0.6 0.9 0.5 0.7 0.6 0.6 2.1 2.5
PBT before EO expense 41.5 -25.8 -2.9 29.5 15.6 16.1 11.0 10.0 42.4 52.7
PBT 41.5 -25.8 -2.9 29.5 15.6 16.1 11.0 10.0 42.4 52.7
Tax 14.5 -7.9 -1.0 10.4 5.5 5.5 3.7 3.4 16.0 18.1
Rate (%) 34.8 30.5 34.8 35.3 35.0 34.0 34.0 34.0 37.8 34.3
Reported PAT 27.1 -17.9 -1.9 19.1 10.1 10.6 7.3 6.6 26.4 34.6
YoY Change (%) LP Loss PL -37.4 -62.6 LP LP -65.2 -11.8 31.3
Margin (%) 8.4 -7.3 -0.7 7.5 4.8 5.5 3.1 2.9 2.4 4.0
Key Assumptions
Refining throughput (mmt) 4.3 4.0 4.5 4.4 4.4 3.2 4.3 4.2 17.1 16.0
Reported GRM (USD/bbl) 24.5 -4.5 3.9 15.1 9.8 17.1 8.3 8.2 9.7 10.8

Oil India Buy

CMP: INR375 | TP: INR485 (+28%) EPS CHANGE (%): FY24|25: +9|+6
 Oil realization (post windfall tax) to decline 4% QoQ in  Increase in production at the Baghjan field is a key
3QFY24. monitorable over the medium term.
 Expect oil sales at 0.88mmt (up 13% YoY/3% QoQ) and gas  Update on progress of NRL capacity expansion and new
sales of 0.68bcm (down 10% YoY/ 4% QoQ). petrochemicals plant.
Quarterly Performance (INR b)
Y/E March FY23 FY24
FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
Net Sales 59.6 57.8 58.8 56.5 46.4 59.1 60.3 54.0 232.7 219.9
Change (%) 98.6 74.4 57.3 26.1 -22.1 2.4 2.5 -4.3 60.1 -5.5
EBITDA 26.3 18.5 28.6 23.5 23.3 24.9 23.0 22.8 96.8 93.9
% of Net Sales 44.1 32.0 48.6 41.6 50.1 42.1 38.1 42.1 41.6 42.7
Change (%) 114.1 102.3 125.3 19.9 -11.5 34.6 -19.6 -3.0 80.4 -3.0
D,D&A 3.9 4.2 4.5 3.3 4.0 4.2 4.6 5.2 15.9 18.1
Interest 2.0 2.1 2.0 1.1 1.7 2.2 2.1 2.4 7.2 8.4
OI (incl. Oper. other inc) 0.7 8.9 1.0 4.3 3.3 7.1 3.4 3.0 14.9 16.8
PBT before exceptional 21.1 21.1 23.0 23.4 21.0 25.5 19.6 18.2 88.6 84.3
PBT after exceptional 21.1 21.1 23.0 23.4 21.0 1.9 19.6 18.2 88.6 60.7
Tax 5.5 3.9 5.6 5.5 4.9 -1.4 4.9 3.6 20.5 12.1
Rate (%) 26.2 18.4 24.2 23.5 23.2 -5.4 25.2 20.0 23.1 14.3
PAT 15.6 17.2 17.5 17.9 16.1 3.3 14.7 14.6 68.1 48.6
Change (%) 206.2 241.1 40.3 9.7 3.7 -81.1 -16.0 -18.6 75.2 -28.6
Adj. PAT 15.6 17.2 17.5 17.9 16.1 19.1 14.7 14.6 68.1 64.4
Key Assumptions
Oil sales (mmt) 0.76 0.78 0.77 0.77 0.75 0.85 0.88 0.78 3.08 3.25
Gas sales (bcm) 0.59 0.66 0.61 0.59 0.54 0.65 0.68 0.62 2.45 2.50
Net Oil Realization (USD/bbl) 112.7* 74.7 77.1 76.1 74.3 75.5 72.5 73.0 85.2 73.8
*1QFY23 is before windfall tax effect

January 2024 200

 December 2023 Results Preview | Sector: Oil & Gas

ONGC Buy
CMP: INR205 | TP: INR270 (+32%) EPS CHANGE (%): FY24|25: -13|-1
 Oil realization (before windfall tax) to decline 6% YoY/3%  Expect oil and gas sales volumes to grow 1% QoQ. VAP
QoQ, in line with Brent movement in 3QFY24. sales to also expand 1% QoQ
 Update on first oil from the KG Basin and ramp-up of gas  Further delay in oil production from KG Basin or decline in
production remain the key monitorable. oil prices below USD75/bbl are key downside risks.
Standalone - Quarterly Earning Model (INR b)
Y/E March FY23 FY24
FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
Net Sales 423.2 383.2 385.8 362.9 338.1 351.6 349.9 393.1 1,555.2 1,432.7
YoY Change (%) 83.8 57.4 35.5 5.2 -20.1 -8.2 -9.3 8.3 40.9 -7.9
EBITDA 259.3 188.1 204.1 163.4 194.5 183.6 179.0 207.8 814.9 764.9
Margin (%) 61.3 49.1 52.9 45.0 57.5 52.2 51.2 52.9 52.4 53.4
Depreciation 57.1 53.1 64.6 93.0 67.0 59.6 63.8 66.6 267.9 256.9
Interest 6.4 6.7 6.9 7.1 10.1 10.2 10.1 10.1 27.0 40.4
Other Income 7.6 35.3 14.1 19.3 16.1 20.9 17.1 14.3 76.3 68.4
PBT before EO expense 203.4 163.6 146.7 82.6 133.6 134.7 122.2 145.4 596.3 535.9
Extra-Ord expense 0.0 0.0 0.0 92.4 0.0 0.0 0.0 0.0 92.4 0.0
PBT 203.4 163.6 146.7 -9.8 133.6 134.7 122.2 145.4 504.0 535.9
Tax 51.4 35.3 36.3 -7.3 33.5 32.6 30.8 36.6 115.7 133.4
Rate (%) 25.3 21.6 24.7 74.7 25.0 24.2 25.2 25.2 23.0 24.9
Reported PAT 152.1 128.3 110.4 -2.5 100.2 102.2 91.5 108.8 388.3 402.6
Adj PAT 152.1 128.3 110.4 61.8 100.2 102.2 91.5 108.8 452.5 402.6
YoY Change (%) 250.8 50.9 26.0 -30.3 -34.1 -20.3 -17.2 76.1 48.6 -11.0
Margin (%) 35.9 33.5 28.6 17.0 29.6 29.1 26.1 27.7 29.1 28.1
Key Assumptions (USD/bbl)
Oil Realization (pre windfall tax) 108.5 95.5 87.1 77.1 76.5 84.8 82.0 85.0 92.1 82.1
Crude Oil Sold (mmt) 5.0 4.8 4.7 4.7 4.7 4.7 4.7 5.0 19.2 19.1
Gas Sold (bcm) 4.1 4.2 4.2 4.1 4.1 4.0 4.1 4.1 16.7 16.4
VAP Sold (tmt) 671 640 599 613 589 651 655 824 2,523 2,720

Petronet LNG Neutral

CMP: INR226| TP: INR255 (+13%) EPS CHANGE (%): FY24|25: 6|8
 We model in Dahej/Kochi utilization at 91%/21%.  Progress on ongoing projects is a key monitorable.
 Increasing domestic gas supply may lead to a decline in  Expect total PLNG volumes to increase 22.6% YoY but
LNG imports, thereby adversely impacting utilizations. decline 3.8% QoQ.
Standalone - Quarterly Earning Model (INR b)
Y/E March FY23 FY24
FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
Net Sales 142.6 159.9 157.8 138.7 116.6 125.3 132.3 149.4 599.0 523.6
YoY Change (%) 65.9 47.8 25.2 24.3 -18.3 -21.6 -16.1 7.7 38.8 -12.6
EBITDA 10.6 11.7 16.8* 9.4 11.8 12.1 12.5 13.0 48.6 49.5
Margin (%) 7.5 7.3 10.6 6.8 10.1 9.7 9.5 8.7 8.1 9.5
Depreciation 1.9 1.9 1.9 1.9 1.9 1.9 2.1 2.4 7.6 8.4
Interest 0.8 0.8 0.8 0.9 0.7 0.7 0.8 1.0 3.3 3.3
Other Income 1.4 0.9 1.8 1.5 1.5 1.6 1.4 1.2 5.7 5.6
PBT 9.4 9.9 15.9 8.2 10.6 11.0 11.0 10.8 43.3 43.5
Tax 2.4 2.5 4.1 2.0 2.7 2.8 2.8 2.7 10.9 11.2
Rate (%) 25.2 25.1 25.5 24.9 25.6 25.8 25.2 25.2 25.3 25.8
Reported PAT 7.0 7.4 11.8 6.1 7.9 8.2 8.2 8.1 32.4 32.3
Adj PAT 7.0 7.4 11.8 6.1 7.9 8.2 8.2 8.1 32.4 32.3
YoY Change (%) 10.3 -9.6 3.2 -18.1 12.7 9.9 -30.2 32.0 (3.4) -0.4
Margin (%) 4.9 4.7 7.5 4.4 6.8 6.5 6.2 5.4 5.4 6.2
Key Assumptions
Total Volumes (TBtu) 208.0 192.0 167.0 184.0 230.0 223.0 214.6 224.6 751.0 892.2
Dahej utilization (%) 89% 82% 70% 77% 98% 95% 91% 96% 0.8 95%
Kochi utilization (%) 19% 16% 21% 21% 21% 21% 21% 20% 0.2 21%
*includes 'Use or Pay charges' of INR8.5b

January 2024 201

 December 2023 Results Preview | Sector: Oil & Gas

Reliance Industries Buy

CMP: INR2,590 | TP: INR2,855 (+10%)
 Expect consolidated EBITDA to remain flat QoQ at
INR411b.
 Expect production meant for sale at 17.2mmt (up 6% YoY).
Expect EBITDA/mt at USD83 (+22% YoY).
EPS CHANGE (%): FY24|25: -1|+2
 Expect EBITDA at INR168b (up 40% YoY/up 3% QoQ) for
the O2C segment.
 Further clarity on INR750b announcements in the new
energy business, growth in Retail store additions, and any
pricing action in Telecom are the key monitorable.

Consolidated - Quarterly Earning Model (INR b)

Y/E March FY23 FY24
FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
Net Sales 2,193 2,301 2,172 2,129 2,076 2,319 2,402 2,584 8,795 9,380
YoY Change (%) 56.7 37.3 17.4 2.7 -5.4 0.8 10.6 21.3 25.6 6.7
EBITDA 380 312 352 384 381 410 411 419 1,429 1,616
Margin (%) 17.3 13.6 16.2 18.1 18.4 17.7 17.1 16.2 16.2 17.2
Depreciation 89 97 102 115 118 126 125 128 403 497
Interest 40 46 52 58 58 57 52 42 196 210
Other Income 22 35 31 29 38 38 28 9 118 114
PBT before EO expense 273 205 230 241 243 265 263 258 948 1,024
Extra-Ord expense -9 -2 0 0 0 0 0 0 -11 0
PBT 282 206 230 241 243 265 263 258 959 1,024
Tax 78 49 53 28 61 67 67 61 207 255
Rate (%) 27.7 23.6 22.9 11.6 25.2 25.2 25.7 23.7 21.6 24.9
Minority Interest & Profit/Loss of Asso. Cos. 15.5 19.3 19.5 20.0 21.7 24.3 18.9 18.9 74.3 75.6
Reported PAT 188 138 158 193 160 174 176 178 678 693
Adj PAT 182 137 158 193 160 174 176 178 678 693
YoY Change (%) 48.3 0.1 -2.8 19.1 -12.0 27.0 11.6 -7.9 16.0 2.2
Margin (%) 8.3 6.0 7.3 9.1 7.7 7.5 7.3 6.9 7.7 7.4

January 2024 202

 December 2023 Results Preview | Sector: Real Estate

Real Estate
Company New launches to drive sales; DLF, GPL and PEPL to lead the pack
Brigade Enterprises MOFSL coverage universe likely to post 76% YoY growth in sales in 3QFY24
DLF
Godrej Properties  Our coverage universe is expected to report pre-sales of INR268b, up 76% YoY.
Macrotech Developers The strong growth will be driven by encouraging responses to new launches of
Mahindra Lifespace GPL and PEPL in Gurugram and Hyderabad, which can enable them to report pre-
Oberoi Realty sales of INR50b (each).
Phoenix Mills  Additionally, DLF witnessed a strong response to its big premium project at Sector
Prestige Estates 77, Gurugram, and while our checks suggest that project was sold out, some part
Sobha of sales could spill over to 4QFY24. We expect DLF to report 2x YoY growth in pre-
Sunteck Realty
sales in 3QFY24.
 Supply to gradually pickup: Barring few companies, pre-sales in 1HFY24 were
largely driven by inventory at ongoing projects. However, given that most players
had less than 12 months of inventory post 2Q, new launches has improved
sequentially and would further gather pace in 4QFY24.

DLF, PEPL and GPL to witness highest YoY growth in bookings

 DLF: The company had launched its premium project at Punchkula and Gurugram,
with total GDV of ~INR90b, and our checks suggest that the bulk of inventory was
sold at the launch. Hence, the performance could be similar to 4QFY23 as we
expect DLF to report bookings of INR75b, up 2x YoY.
 Oberoi Realty: We estimate pre-sales of INR16b (up 1.5x YoY) in 3QFY24, driven
by steady sales and a healthy contribution from its new project at Kolshet road,
Thane.
 GPL: We estimate bookings of INR50b, up 54% YoY and flat QoQ, on the back of
a strong response to its new project launch in NCR, which generated sales in
excess of INR25b. Moreover, GPL has launched projects in MMR and Bengaluru.
 PEPL: The company could report a strong performance as we expect pre-sales of
INR50b, up 98% YoY (down 30% QoQ), aided by a positive response to new
launches in Hyderabad and Bengaluru. It had launched a large project in
Hyderabad (Prestige City), and our checks suggest that PEPL has sold a
significant part of inventory.
 BRGD: We bake in a healthy quarter for BRGD with new bookings of INR14b, up
39% YoY, on the back of a large project launch in Bengaluru and inventory of
INR26b.
 MLDL: With key project launches getting pushed to 4QFY24, we expect MLDL to
report new bookings of INR4.5b, up 14% YoY.

Pritesh Sheth - Research Analyst (Pritesh.Sheth@motilaloswal.com)

Sourabh Gilda - Research Analyst (Sourabh.Gilda@motilaloswal.com)
July 2021 203
 December 2023 Results Preview | Sector: Real Estate

SOBHA, PEPL, and GPL are our top picks

 With interest rates likely to have peaked, a major headwind is now behind.
Absorption for the top-7 cities has averaged ~130,000 units for the last four
quarters vs. ~110,000 units in the preceding four quarters. Absorption is now
expected to pick up further once interest rates start declining in 2HFY25.
 Industry growth will be complemented by continued market share gains by large
developers as they have increased penetration into at least a couple of more
markets.
 With a favorable demand-supply balance, a comfortable inventory position, and
healthy pricing power, we expect buoyancy in the real estate sector to continue.
 Most of the listed companies are trading above the value of their existing
pipelines, so we prefer companies that are able to outperform their peers and
whose valuations do not reflect this outperformance. SOBHA, PEPL, and GPL are
our preferred picks.
Exhibit 1: Expected quarterly performance summary
SALES (INR M) EBDITA (INR M) NET PROFIT (INR M)
CMP
RECO Var Var Var Var Var Var
Sector (INR) Dec-23 Dec-23 Dec-23
% YoY % QoQ % YoY % QoQ % YoY % QoQ
Brigade Enterpr. 896 Buy 10,201 24.4 -25.4 2,673 28.6 -17.7 968 70.1 -27.5
DLF 724 Neutral 19,729 32.0 46.4 7,183 50.5 55.4 8,491 63.6 36.5
Godrej Properties 2001 Buy 1,095 -44.2 -68.1 -1,244 Loss Loss 470 -16.6 -35.3
Macrotech Developers 1050 Buy 28,067 58.2 60.4 6,789 68.2 63.2 4,202 40.1 100.1
Mahindra Lifespace 545 Buy 288 -84.6 62.2 -706 Loss Loss -279 Loss Loss
Oberoi Realty 1448 Neutral 11,310 -30.6 -7.1 5,671 -39.7 -11.1 4,000 -43.1 -12.4
Phoenix Mills 2253 Neutral 9,296 35.9 6.2 5,677 47.6 10.5 2,759 56.4 5.9
Prestige Estates 1185 Buy 24,018 3.7 7.4 6,660 16.0 12.4 1,936 51.5 4.3
Sobha 1023 Buy 9,246 6.5 24.7 970 9.3 28.6 332 4.5 122.3
Sunteck Realty 448 Buy 459 -48.7 83.7 -293 PL Loss -516 PL Loss
Real Estate 1,13,709 13.0 14.6 33,381 8.9 14.6 22,363 13.4 16.3
Source: Company, MOFSL

Exhibit 2: Expected operational performance summary

PRE-SALES (INR b) VOLUME (MSF) COLLECTIONS (INR b)
Var Var Var Var Var Var
Sector Dec-23 Dec-23 Dec-23
% YoY % QoQ % YoY % QoQ % YoY % QoQ
Macrotech Developers 34 11 -3 2.7 9 5 26 -3 -6
Oberoi Realty 16 155 67 0.5 132 133 10 145 -5
Godrej Properties 50 54 -1 6.7 51 27 37 118 54
DLF 75 198 235 4.4 82 235 21 49 -12
Prestige Estates 50 98 -30 5.0 73 -27 33 67 40
Brigade Enterprise 14 39 12 2.1 36 25 17 13 15
Sobha 20 37 13 1.7 12 -1 14 18 8
Mahindra Lifespace 5 13 12 0.5 -15 -23 3 -9 -11
Sunteck Realty 5 14 14 NA NA NA 3 -3 37
Real Estate 268 76 18 24 47 17 163 43 15
Source: Company, MOFSL

January 2024 204

 December 2023 Results Preview | Sector: Real Estate

Exhibit 3: Relative performance – three-months (%) Exhibit 4: Relative performance – one-year (%)
Nifty Index MOFSL Real Estate Index Nifty Index MOFSL Real Estate Index
160 200

135 150

110 100

85 50

60 0
Sep-23 Oct-23 Nov-23 Dec-23 Dec-22 Mar-23 Jun-23 Sep-23 Dec-23
Source: Bloomberg, MOFSL Source: Bloomberg, MOFSL

Exhibit 5: Real estate coverage – operational snapshot

4QFY22 1QFY23 2QFY23 3QFY23 4QFY23 1QFY24 2QFY24 3QFY24E YoY (%) QoQ (%)
Sales (INR b)
DLF 27 20 21 25 85 20 22 75 198 9
Godrej Properties 32 25 24 33 41 23 50 50 54 123
Macrotech 35 28 31 30 30 34 35 34 12 5
Oberoi Realty 9 8 12 6 7 5 10 16 155 103
Prestige Estates 33 30 35 25 39 39 71 50 98 81
Brigade Enterprise 10 8 8 10 15 10 12 14 39 25
Sobha 11 11 12 14 15 15 17 20 37 18
Mahindra Lifespace 3 6 4 5 4 4 5 5 13 30
Sunteck Realty 5 3 3 4 5 4 4 5 14 2
Aggregate Sales (INR b) 166 140 150 152 240 152 227 268 76 49
Volume (msf)
DLF 2.4 1.2 1.6 1.5 5.0 0.9 1.3 4.4 193 46
Godrej Properties 4.2 2.8 2.7 4.4 5.3 2.3 5.2 6.7 51 133
Macrotech 3.0 2.2 2.1 2.5 2.5 2.8 2.6 2.7 9 -7
Oberoi Realty 0.5 0.4 0.4 0.4 0.2 0.1 0.2 0.5 50 51
Prestige Estates 4.9 3.6 4.6 2.9 4.0 3.8 6.8 5.0 73 80
Brigade Enterprise 1.5 1.2 1.2 1.5 2.4 1.5 1.7 2.1 36 15
Sobha 1.3 1.4 1.3 1.5 1.5 1.4 1.7 1.7 13 21
Mahindra Lifespace 0.4 0.7 0.5 0.6 0.5 0.4 0.7 0.5 -15 62
Aggregate Volume (msf) 18.3 13.5 14.3 15.3 21.3 13.2 20.3 23.6 54 54
Collections (INR b)
DLF 12 10 12 13 18 15 24 21 105 60
Godrej Properties 29 18 22 21 43 23 24 37 7 2
Macrotech 28 26 24 27 29 24 28 26 16 15
Oberoi Realty 10 6 9 4 9 11 11 10 25 -1
Prestige Estates 25 21 26 23 28 27 24 33 -8 -13
Brigade Enterprise 10 9 10 9 10 8 14 17 46 72
Sobha 11 9 11 14 12 11 13 14 16 10
Mahindra Lifespace 3 3 3 3 3 3 2 3 -25 -22
Sunteck Realty 4 3 3 3 3 3 3 3 -6 11
Aggregate Collections (INR b) 131.3 104.2 119.2 117.5 155.0 126.0 142.0 163.2 19 13
Source: Company, MOFSL

January 2024 205

 December 2023 Results Preview | Sector: Real Estate

Exhibit 6: Comparative Valuation

CMP EPS (INR) PE (x) PB (x) ROE (%)
Company Name INR Reco FY24E FY25E FY26E FY24E FY25E FY26E FY24E FY25E FY26E FY24E FY25E FY26E
Real Estate 52.1 36.7 33.5 4.8 4.3 3.8 9.2 11.7 11.4
Brigade Enterpr. 896 Buy 17.3 35.7 40.2 51.9 25.1 22.3 5.1 4.3 3.6 10.4 18.7 17.7
DLF 724 Neutral 14.5 21.5 17.2 50.1 33.7 42.0 3.2 2.9 2.7 9.1 12.4 9.1
Godrej Properties 2,001 Buy 26.7 43.0 48.5 74.9 46.5 41.2 5.6 5.0 4.5 7.7 11.4 11.5
Macrotech Developers 1,050 Buy 15.1 24.9 27.9 69.3 42.2 37.7 7.3 6.4 5.7 11.0 16.2 16.0
Mahindra Lifespace 545 Buy 0.5 7.5 6.0 1,058.0 73.0 90.8 4.6 4.4 4.2 0.4 6.2 4.7
Oberoi Realty 1,448 Neutral 42.2 49.2 66.9 34.3 29.4 21.6 3.9 3.4 3.0 11.8 12.3 14.7
Phoenix Mills 2,253 Neutral 57.7 71.7 100.8 39.0 31.4 22.3 4.3 3.8 3.3 11.6 12.8 15.7
Prestige Estates 1,185 Buy 27.6 19.7 25.5 43.0 60.1 46.5 4.1 3.8 3.5 9.9 6.5 7.9
Sobha 1,023 Buy 16.1 40.8 83.6 63.7 25.1 12.2 3.8 3.3 2.6 6.1 14.1 23.9
Sunteck Realty 448 Buy 8.2 15.7 22.9 54.9 28.5 19.6 2.3 2.1 1.9 4.2 7.7 10.3

January 2024 206

 December 2023 Results Preview | Sector: Real Estate

The tables below provide a snapshot of actual and estimated numbers for companies under the MOFSL Coverage
Universe.

Brigade Enterprise Buy

CMP: INR896 | TP: INR1000 (12%) EPS CHANGE (%): FY24|25: 0|0
 We expect revenue in 3QFY24 to increase 24% YoY to  New bookings for the quarter are likely to increase 39% YoY to
INR10b. INR14b on the back of 2msf new launch in Bengaluru
 EBITDA is likely to reach INR2.7b with a margin of 26%.

Consolidated quarterly earnings model (INR m)

Y/E March FY23 FY24E
FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q
Gross Sales 9,025 8,792 8,203 8,428 6,540 13,666 10,201 10,397 34,448 40,803
YoY Change (%) 135.8 16.8 -10.9 -10.6 -27.5 55.4 24.4 23.4 14.9 18.4
Total Expenditure 6,698 6,628 6,124 6,406 4,792 10,418 7,528 7,659 25,856 30,397
EBITDA 2,327 2,165 2,079 2,022 1,748 3,248 2,673 2,737 8,592 10,406
Margins (%) 25.8 24.6 25.3 24.0 26.7 23.8 26.2 26.3 24.9 25.5
Depreciation 751 780 781 834 681 757 757 834 3,146 3,030
Interest 1,061 1,096 1,184 1,000 1,081 1,100 1,134 1,219 4,342 4,534
Other Income 178 330 383 295 315 413 341 295 1,186 1,364
PBT before EO expense 693 618 497 483 300 1,803 1,123 979 2,291 4,206
Extra-Ord expense -97 -183 0 -170 0 0 0 0 -450 0
PBT 790 801 497 653 300 1,803 1,123 979 2,741 4,206
Tax 184 283 70 21 82 679 283 219 558 1,262
Rate (%) 23.3 35.4 14.1 3.1 27.1 37.6 25.2 22.3 20.4 30.0
MI & Profit/Loss of Asso. Cos. -271 -258 -142 -62 -166 -210 -128 -78 -733 -583
Reported PAT 877 776 569 694 385 1,335 968 839 2,916 3,527
Adj PAT 802 658 569 530 385 1,335 968 839 2,515 3,527
YoY Change (%) -470.8 74.8 -25.9 -18.2 -52.0 103.0 70.1 58.4 59.7 40.3
Margins (%) 8.9 7.5 6.9 6.3 5.9 9.8 9.5 8.1 7.3 8.6

DLF Neutral
CMP: INR724 | TP: INR650 (-10%) EPS CHANGE (%): FY24|25: 0|0
 We expect revenue to increase 32% YoY to INR20b due to  New bookings are expected to increase 3x YoY to INR74b in
commencement of project deliveries in its new products 3Q due to strong response sector 77 project
portfolio
 DLF to report EBITDA of INR7.2b with 5pps increase in
margin (YoY)
Consolidated quarterly earnings model (INR m)
Y/E March FY23 FY24E
FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q
Gross Sales 14,416 13,023 14,948 14,561 14,232 13,477 19,729 42,239 56,948 89,677
YoY Change (%) 26.5 -12.1 -3.5 -5.9 -1.3 3.5 32.0 190.1 -0.4 57.5
Total Expenditure 10,280 8,657 10,176 10,577 10,271 8,853 12,546 26,221 39,690 57,890
EBITDA 4,137 4,367 4,772 3,984 3,962 4,624 7,183 16,019 17,259 31,787
Margins (%) 28.7 33.5 31.9 27.4 27.8 34.3 36.4 37.9 30.3 35.4
Depreciation 373 367 386 360 364 370 395 437 1,486 1,566
Interest 1,052 1,069 954 846 849 902 617 267 3,921 2,634
Other Income 747 582 659 1,196 985 1,287 1,166 1,046 3,173 4,484
PBT before EO expense 3,458 3,512 4,090 3,974 3,734 4,639 7,337 16,360 15,024 32,071
Extra-Ord expense 0 0 0 0 0 0 0 0 0 0
PBT 3,458 3,512 4,090 3,974 3,734 4,639 7,337 16,360 15,024 32,071
Tax 876 910 1,104 1,125 1,014 1,122 1,849 4,084 4,015 8,069
Rate (%) 25.3 25.9 27.0 28.3 27.2 24.2 25.2 25.0 33.2 33.2
MI & Profit/Loss of Asso. Cos. 2,111 2,169 2,203 2,848 2,541 2,701 3,003 3,532 9,330 11,777
Reported PAT 4,692 4,772 5,189 5,696 5,261 6,219 8,491 15,808 20,340 35,779
Adj PAT 4,692 4,772 5,189 5,696 5,261 6,219 8,491 15,808 20,340 35,779
YoY Change (%) 39.2 25.9 -16.7 40.5 12.1 30.3 63.6 177.5 16.6 75.9
Margins (%) 32.5 36.6 34.7 39.1 37.0 46.1 43.0 37.4 35.7 39.9
Source: Company, MOFSL

January 2024 207

 December 2023 Results Preview | Sector: Real Estate

Godrej Properties Buy

CMP: INR2,000 | TP: INR2,300 (15%) EPS CHANGE (%): FY24|25: 0|0
 We expect revenue in 3QFY24 to decline 44% YoY to INR1.1b  Aided by strong response to new launches, GPL’s pre-sales
as project completions will be skewed towards 4QFY24 could increase 54% YoY to INR50b.
 GPL’s PAT can decrease 17% YoY to INR0.5b.

Consolidated quarterly earnings model (INR m)

Y/E March FY23 FY24E
FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q
Gross Sales 2,447 1,651 1,962 16,463 9,360 3,430 1,095 8,015 22,523 21,900
YoY Change (%) 184.0 27.7 -29.6 23.7 282.6 107.8 -44.2 -51.3 23.4 -2.8
Total Expenditure 2,589 2,325 2,130 12,996 9,303 4,047 2,339 4,639 20,040 20,327
EBITDA -142 -674 -168 3,466 57 -617 -1,244 3,376 2,482 1,573
Margins (%) -5.8 -40.8 -8.6 21.1 0.6 -18.0 -113.6 42.1 11.0 7.2
Depreciation 55 56 65 66 69 74 70 67 241 280
Interest 345 406 457 535 297 480 604 943 1,742 2,324
Other Income 1,817 2,041 2,084 1,926 3,299 2,621 2,088 2,431 7,867 10,439
PBT before EO expense 1,276 905 1,394 4,791 2,990 1,451 170 4,797 8,366 9,408
Extra-Ord expense 0 0 0 0 1,550 0 0 0 0 -1,550
PBT 1,276 905 1,394 4,791 1,440 1,451 170 4,797 8,366 7,858
Tax 327 -188 449 1,159 592 388 34 1,343 1,747 2,357
Rate (%) 25.6 -20.7 32.2 24.2 41.1 26.7 20.0 28.0 20.9 30.0
MI & Profit/Loss of Asso. Cos. -516 -423 -381 913 488 -336 334 349 -407 834
Reported PAT 433 670 564 4,545 1,336 726 470 3,803 6,212 6,335
Adj PAT 433 670 564 4,545 2,248 726 470 3,803 6,212 7,247
YoY Change (%) 154.6 87.7 44.8 75.6 419.3 8.4 -16.6 -16.3 77.2 16.7
Margins (%) 17.7 40.6 28.7 27.6 24.0 21.2 42.9 47.4 27.6 33.1
Source: Company, MOFSL

Macrotech Developers Buy

CMP: INR1,050 | TP: INR1,200 (+14%) EPS CHANGE (%): FY24|25: 0|0
 We expect revenue to increase 58% YoY to INR28b.  The company is has reported bookings of INR34b, up 12%
YoY
 EBITDA to grow by 68% YoY to INR6.8b driven by 140bps
expansion in EBITDA margin.
Consolidated quarterly earnings model (INR m)
Y/E March FY23 FY24E
FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q
Gross Sales 26,758 17,654 17,738 32,554 16,174 17,496 28,067 38,501 94,704 1,00,238
YoY Change (%) 67 -17 -14 -5 -40 -1 58 18 2.6 5.8
Total Expenditure 22,091 13,414 13,701 24,837 12,874 13,335 21,277 28,694 74,042 76,181
EBITDA 4,667 4,240 4,038 7,717 3,300 4,161 6,789 9,807 20,661 24,057
Margins (%) 17.4 24.0 22.8 23.7 20.4 23.8 24.2 25.5 21.8 24.0
Adj. EBITDA (as per co.) 9,030 5,250 5,700 9,800 4,600 5,500 6,789 9,807 29,780 26,696
Margins (%) 33.7 29.7 32.1 30.1 28.4 31.4 24.2 25.5 31.4 26.6
Depreciation 196 219 217 296 240 293 280 265 928 1,078
Interest 1,193 1,249 1,176 1,172 1,241 1,231 1,260 1,235 4,791 4,967
Other Income 0 -42 1,286 163 544 55 385 557 1,408 1,541
PBT before EO expense 3,278 2,730 3,931 6,412 2,363 2,692 5,634 8,863 16,350 19,553
Extra-Ord expense 0 -11,774 0 0 0 0 0 0 -11,774 0
PBT 3,278 -9,044 3,931 6,412 2,363 2,692 5,634 8,863 4,576 19,553
Tax 559 270 -119 -1,080 556 624 1,409 2,300 -370 4,888
Rate (%) 17.0 -3.0 -3.0 -16.8 23.5 23.2 25.0 25.9 -0.1 0.3
MI & Profit/Loss of Asso. Cos. 6 16 0 58 15 40 24 1 80 80
Reported PAT 2,713 -9,330 4,050 7,434 1,792 2,028 4,202 6,563 4,866 14,584
Adj PAT (as per co.) 1,200 3,670 3,000 7,500 1,700 2,100 4,202 6,563 15,370 14,564
YoY Change (%) -2 28 8 31 42 -43 40 -12 21.9 -5.2
Margins (%) 4.5 20.8 16.9 23.0 10.5 12.0 15.0 17.0 16.2 14.5
Source: Company, MOFSL

January 2024 208

 December 2023 Results Preview | Sector: Real Estate

Mahindra Lifespaces Buy

CMP: INR545 | TP: INR575 (6%) EPS CHANGE (%): FY24|25: 0|0
 Revenue is expected to decrease to INR288b and  We expect MLDL to clock bookings of INR4.5b, up 13% YoY.
profitability will continue to remain weak.
Consolidated quarterly earnings model (INR m)
Y/E March FY23 FY24E
FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q
Income from Operations 946 698 1,869 2,554 980 178 288 1,436 6,066 2,883
YoY Change (%) -36.2 17.8 667.9 57.9 3.7 -74.5 -84.6 -43.8 54.1 -52.5
Total Expenditure 1,265 1,092 1,983 2,827 1,412 527 994 1,093 7,167 4,025
EBITDA -320 -394 -114 -274 -431 -349 -706 344 -1,101 -1,142
Margins (%) -33.8 -56.4 -6.1 -10.7 -44.0 -196.5 -244.8 23.9 -18.2 -39.6
Depreciation 24 32 34 31 30 31 30 30 122 121
Interest 18 25 33 34 42 2 33 54 109 132
Other Income 228 40 112 149 120 79 112 121 530 432
PBT before EO expense -134 -411 -69 -189 -383 -303 -656 379 -803 -963
Extra-Ord expense 338 0 340 0 0 0 0 0 678 0
PBT 204 -411 271 -189 -383 -303 -656 379 -124 -963
Tax 76 -67 -14 34 -94 -108 -169 130 28 -241
Rate (%) 37.0 16.4 -5.1 -17.9 24.4 35.7 25.7 34.2 -22.7 25.0
Minority Interest & Profit/Loss of Asso. Cos. 625 266 48 229 247 6 208 341 1,167 802
Reported PAT 754 -77 332 6 -43 -189 -279 591 1,014 80
Adj PAT 541 -77 -8 6 -43 -189 -279 591 461 80
YoY Change (%) NM NM NM NM NM NM NM NM NM NM
Margins (%) 57.2 -11.1 -0.4 0.2 -4.4 -106.5 -96.8 41.1 7.6 2.8

Oberoi Realty Neutral

CMP: INR985 | TP: INR1,140 (+16%) EPS CHANGE (%): FY24|25: 0|0
 We expect revenue to decrease 31% YoY to INR11b.  New bookings could increase 155% YoY to INR16b driven by
healthy contribution from its new project in Thane.
 OBER’s EBITDA could decline 40% YoY to INR5.6b due to
margin contraction.
Consolidated quarterly earnings model (INR m)
Y/E March FY23 FY24E
FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q
Net Sales 9,131 6,886 16,295 9,614 9,100 12,174 11,310 11,059 41,926 43,642
YoY Change (%) 221.2 -8.7 95.8 16.8 -0.3 76.8 -30.6 15.0 55.6 4.1
Total Expenditure 4,209 3,782 6,891 5,927 4,362 5,792 5,639 5,795 20,808 21,588
EBITDA 4,922 3,104 9,404 3,687 4,737 6,382 5,671 5,264 21,117 22,054
Margins (%) 53.9 45.1 57.7 38.3 52.1 52.4 50.1 47.6 50.4 50.5
Depreciation 98 101 102 97 113 113 120 114 398 460
Interest 326 363 381 621 615 565 442 445 1,691 2,066
Other Income 217 232 220 337 236 264 260 244 1,006 1,004
PBT before EO expense 4,715 2,873 9,141 3,306 4,245 5,968 5,370 4,949 20,036 20,531
Extra-Ord expense 0 0 0 0 0 0 0 0 0 0
PBT 4,715 2,873 9,141 3,306 4,245 5,968 5,370 4,949 20,036 20,531
Tax 1,137 692 2,260 -896 1,046 1,421 1,369 1,399 3,193 5,235
Rate (%) 24.1 24.1 24.7 (27) 24.6 23.8 25.5 28 15.9 25.5
MI & Profit/Loss of Asso. Cos. 453 1,006 144 601 17 21 0 0 2,204 38
Reported PAT 4,031 3,186 7,026 4,803 3,216 4,568 4,000 3,550 19,046 15,334
Adj PAT 4,031 3,186 7,026 4,803 3,216 4,568 4,000 3,550 19,046 15,334
YoY Change (%) 400.0 19.5 50.3 106.7 -20.2 43.4 -43.1 -26.1 81.9 -19.5
Margins (%) 44.1 46.3 43.1 50.0 35.3 37.5 35.4 32.1 45.4 35.1
Source: Company, MOFSL

January 2024 209

 December 2023 Results Preview | Sector: Real Estate

Phoenix Mills Neutral

CMP: INR2,253 | TP: INR2,000 (-11%) EPS CHANGE (%): FY24|25: 0|0
 We expect revenue to increase 36% YoY to INR9b in 3QFY24  EBITDA margin is likely to expand 500bps with EBITDA
driven by contribution from new malls and healthy reaching INR5.7b
consumption growth in existing portfolio
Consolidated quarterly earnings model (INR m)
Y/E March FY23 FY24E FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q
Gross Sales 5,744 6,511 6,838 7,290 8,106 8,750 9,296 9,095 26,383 35,247
YoY Change (%) 188.2 79.0 60.9 47.2 41.1 34.4 35.9 24.7 77.8 33.6
Total Expenditure 2,515 2,702 2,994 2,983 3,183 3,612 3,620 3,544 11,194 13,959
EBITDA 3,229 3,809 3,845 4,307 4,923 5,138 5,677 5,551 15,189 21,288
Margins (%) 56.2 58.5 56.2 59.1 60.7 58.7 61.1 61.0 57.6 60.4
Depreciation 500 559 569 650 630 659 900 936 2,278 3,125
Interest 741 834 866 971 957 965 943 972 3,412 3,836
Other Income 235 324 347 257 290 316 315 335 1,163 1,256
PBT before EO expense 2,223 2,739 2,757 2,943 3,627 3,830 4,149 3,978 10,663 15,584
Extra-Ord expense 5,568 0 0 484 0 -78 0 0 6,052 0
PBT 7,791 2,739 2,757 3,428 3,627 3,752 4,149 3,978 16,714 15,584
Tax 341 520 633 496 730 714 788 729 1,989 2,961
Rate (%) 15.3 19.0 23.0 16.8 20.1 18.6 19.0 18.3 18.7 19.0
MI & P/L of Asso. Cos. 263 361 360 391 492 512 602 708 1,375 2,314
Reported PAT 7,187 1,858 1,764 2,541 2,405 2,526 2,759 2,540 13,350 10,309
Adj PAT 1,619 1,858 1,764 2,057 2,405 2,604 2,759 2,540 7,298 10,309
YoY Change (%) -765.7 220.3 78.3 96.3 48.5 40.1 56.4 23.5 121.3 1,757.0
Margins (%) 28.2 28.5 25.8 28.2 29.7 29.8 29.7 27.9 27.7 29.2

Prestige Estates Buy

CMP: INR1185 | TP: INR1300 (10%) EPS CHANGE (%): FY24|25: 0|0
 We expect revenue to increase 4% YoY to INR24b in 3QFY24.  On the back of strong response to new launch in Hyderabad,
PEPL is expected to report pre-sales of INR50b, up 98% YoY.
 PEPL can report EBITDA of INR6.6b with 300bps
improvement in margin
Consolidated quarterly earnings model (INR m)
Y/E March FY23 FY24E
FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q
Net Sales 19,385 14,277 23,170 26,318 16,809 22,364 24,018 32,881 83,150 96,071
YoY Change (%) 42.3 9.8 74.5 9.6 -13.3 56.6 3.7 24.9 30.1 15.5
Total Expenditure 14,768 10,591 17,428 19,500 11,542 16,439 17,358 23,889 62,287 69,228
EBITDA 4,617 3,686 5,742 6,818 5,267 5,925 6,660 8,992 20,863 26,844
Margins (%) 23.8 25.8 24.8 25.9 31.3 26.5 27.7 27.3 25.1 27.9
Depreciation 1,468 1,626 1,698 1,679 1,655 1,741 1,868 1,998 6,471 7,262
Interest 1,847 1,863 2,009 2,347 2,382 2,639 2,850 2,905 8,066 10,776
Other Income 733 470 305 3,062 2,854 1,684 1,076 1,111 4,570 6,725
PBT before EO expense 2,035 667 2,340 5,854 4,084 3,229 3,018 5,200 10,896 15,531
Extra-Ord expense 1,497 1,463 0 119 0 8,512 0 0 3,079 0
PBT 3,532 2,130 2,340 5,973 4,084 11,741 3,018 5,200 13,975 15,531
Tax 996 625 704 1,150 863 2,564 755 1,540 3,475 3,883
Rate (%) 28.2 29.3 30.1 19.3 21.1 21.8 25.0 29.6 24.9 25.0
MI & Profit/Loss of Asso. Cos. 487 98 358 139 552 668 328 -236 1,250 1,313
Reported PAT 2,049 1,407 1,278 4,684 2,669 8,509 1,936 3,895 9,250 10,336
Adj PAT 974 373 1,278 4,588 2,669 1,856 1,936 3,895 7,213 10,356
YoY Change (%) 112.7 -52.3 47.6 87.6 174.0 397.2 51.5 -15.1 58.5 43.6
Margins (%) 5.0 2.6 5.5 17.4 15.9 8.3 8.1 11.8 8.7 10.8

January 2024 210

 December 2023 Results Preview | Sector: Real Estate

Sobha Buy
CMP: INR1,023 | TP: INR1400 (37%) EPS CHANGE (%): FY24|25: 0|0
 We expect revenue to increase 7% YoY to INR9b in 3QFY24.  Sobha reported bookings of INR19.5b, up 37% YoY aided by
new launches in Bengaluru and Kerala.
 EBITDA and Profits are not comparable due to restatement.
Consolidated quarterly earnings model (INR m)
Y/E March FY23 FY24E
FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q
Net Sales 5,646 6,673 8,682 12,099 9,079 7,412 9,246 9,825 33,101 35,563
YoY Change (%) 25.8 -14.4 39.5 70.3 60.8 11.1 6.5 -18.8
Total Expenditure 4,918 5,751 7,794 10,943 8,425 6,658 8,276 8,114 29,407 31,473
EBITDA 728 922 888 1,156 654 754 970 1,711 3,694 4,090
Margins (%) 12.9 13.8 10.2 9.6 7.2 10.2 10.5 17.4 11.2 11.5
Depreciation 147 179 175 178 183 193 190 187 678 753
Interest 614 632 660 611 611 639 608 609 2,490 2,466
Other Income 117 233 298 302 313 324 270 337 923 1,245
PBT before EO expense 84 344 351 669 173 247 443 1,252 1,449 2,115
Extra-Ord expense 0 0 0 0 0 0 0 0 0 0
PBT 84 344 351 669 173 247 443 1,252 1,449 2,115
Tax 39 152 33 183 52 97 111 306 407 567
Rate (%) 46.4 44.2 9.4 27.4 30.2 39.4 25.0 24.5 28.1 26.8
MI & Profit/Loss of Asso. Cos. 0 0 0 0 0 0 0 0 0 0
Reported PAT 45 192 318 486 121 149 332 946 1,042 1,548
Adj PAT 45 192 318 486 121 149 332 946 1,042 1,548
YoY Change (%) -87.1 -69.6 -47.9 242.3 168.3 -22.2 4.5 94.6 -39.8 48.6
Margins (%) 0.8 2.9 3.7 4.0 1.3 2.0 3.6 9.6 3.1 4.4

Sunteck Realty Buy

CMP: INR448 | TP: INR640 (43%) EPS CHANGE (%): FY24|25: 0|0
 We expect revenue to decrease 49% YoY to INR4.6b in  We expect pre-sales to jump 14% YoY to INR4.5b aided by
3QFY24. contribution from its new project in Kalyan
 Profitability to remain weak due to lower project
recognition.
Consolidated quarterly earnings model (INR m)
Y/E March FY23 FY24E
FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q
Net Sales 1,435 807 893 489 706 250 459 7,759 3,624 9,173
YoY Change (%) -35.4 68.8 43.4 219.2 -50.8 -69.1 -48.7 1,487.5
Total Expenditure 983 707 713 579 780 391 752 5,227 2,982 7,150
EBITDA 452 100 180 -91 -75 -141 -293 2,532 642 2,023
Margins (%) 31.5 12.4 20.2 -18.6 -10.6 -56.5 -63.9 32.6 17.7 22.1
Depreciation 21 23 22 25 18 22 21 10 92 72
Interest 198 176 196 289 173 158 151 272 859 754
Other Income 52 70 81 80 178 113 10 1 284 303
PBT before EO expense 285 -29 44 -324 -87 -208 -455 2,251 -24 1,500
Extra-Ord expense 0 0 0 0 0 0 0 0 0 0
PBT 285 -29 44 -324 -87 -208 -455 2,251 -24 1,500
Tax 62 -10 42 -62 -27 -64 75 391 31 375
Rate (%) 21.7 36.3 95.3 19.2 31.0 30.5 -16.5 17.4 -125.6 25.0
MI & Profit/Loss of Asso. Cos. -27 -42 -19 17 7 -6 -14 -57 -70 -70
Reported PAT 250 23 21 -279 -67 -139 -516 1,918 15 1,195
Adj PAT 250 23 21 -279 -67 -139 -516 1,918 15 1,195
YoY Change (%) NA -90.6 -11.4 NA -75.8 105.7 272.1 -471.4 NA NA
Margins (%) 17.4 2.9 2.3 -57.1 -9.6 -55.6 -112.6 24.7 0.4 13.0

January 2024 211

 December 2023 Results Preview | Sector: Retail

Retail
Company Demand environment likely to remain soft
Aditya Birla Fashion
Avenue Supermarts The demand expect to remain soft in the retail space across categories. Demand was
Barbeque Nation weak in Oct’23 for most of the players due to Shraadh and Navratri, but the onset of the
Bata India
festive season in Nov’23 led to some improvement in the demand. However, the trend
Campus Activewear
has been mixed since then, and retailers have tried to incentivize consumers by
Devyani Intl.
Jubilant Foodworks
increasing discounts, reducing ASPs, offering low-value products, and early EOSS (end of
Metro Brands season sale) to support demand growth.
Raymond
Relaxo Footwear Weak volume, soft pricing impact SSSG
Restaurant Brands We expect overall revenue to grow 21% YoY to INR1.1t in 3QFY24, which would be
Sapphire Foods driven majorly by footprint additions. SSSG could remain muted for most retailers due
Shoppers Stop
to the absence of volume recovery and price hikes. In FY23, most retailers increased
Titan Company
prices to pass on high RM costs, which boosted SSSG for premium retailers. However,
Trent
V-Mart Retail with falling ASPs and drying volumes, growth has been subdued . This slowdown is likely
Vedant Fashions to persist across premium and value fashion categories. SHOP and Pantaloons are
Westlife Foodworld expected to report flat SSSG, while TRENT could be the only outlier to outperform the
segment. VMART in a pre-quarter update reported 5% standalone SSSG, indicating a
recovery. The wedding season shifting to Nov’23 would lead to positive SSSG for
Vedant Fashions but may not fully compensate for the decline seen in the last
couple of quarters. QSR/CDR categories continued to witness demand pressures due to
Shraadh and Navratri. Pressure persisted in the Pizza and Burger categories in 3QFY24 as
consumer preferred value products amid downtrading. However, RBA is likely to beat
the market trend for the second straight quarter.

Revenue growth led by footprint additions

Overall revenue growth of 21% YoY for 3QFY24 is expected to be driven mainly by
store additions, as same-store sales remained weak owing to muted demand. 3Q is
likely to have seen higher store adds as the majority of stores are usually added in
the second half of the year. However, few retailers, like Pantaloons, BBQ and Pizza
Hut, have reduced the pace of store additions given weak consumption trends. This
trend may extend to other retailers as well if growth does not pick up. Key outliers
seeing aggressive store adds are TRENT, RBA and Metro, which continue to see
healthy momentum in store additions. We expect Westside/Zudio to add 5/30
stores in 3QFY24, taking the total store count to 228/441.

Weak SSSG to weigh on operating margins

The cool off in raw material prices have eased pressure on gross margins, which has
allowed retailers to reduce pricing in order to drive demand. We expect gross margins
to remain flat YoY/+50bp QoQ. However, a decline in SSSG could hurt store
productivity and lead to operating deleverage. However with the controlled SG&A
expenses (related to ads and marketing costs) and slow store expansions by some
retailers, may improve EBITDA margin by 40bp YoY in 3QFY24. We expect overall
EBITDA to grow by 26% YoY for our coverage universe.

Aliasgar Shakir - Research Analyst (Aliasgar.Shakir@motilaloswal.com)

April 2023Analyst: Tanmay Gupta (Tanmay.Gupta@motilaloswal.com) | Harsh Gokalgandhi (Harsh.Gokalgandhi@motilaloswal.com)
Research 212
 December 2023 Results Preview | Sector: Retail

Valuation and View

TRENT, DMART and Raymond remain strong candidates (BUY) considering their
healthy balance sheets and strong secular growth momentum. We continue to
monitor VMART, given its comfortable valuations, recovery in SSSG, and likelihood
of a decline in losses. In the footwear space, METRO remains a strong player (BUY),
backed by its effective retail economics and healthy growth potential. In the QSR
space, we maintain our BUY rating on JUBI owing to its strong and unmatched moats
of delivery, value, and technological advantage. We also prefer DEVYANI and
SAPPHIRE for their strong growth outlook, robust fundamentals of KFC, and the
turnaround expected in Pizza Hut.

Exhibit 1: Summary of quarterly estimates

SALES (INR M) EBDITA (INR M) NET PROFIT (INR M)
CMP
RECO Var Var Var Var Var Var
Sector (INR) Dec-23 Dec-23 Dec-23
% YoY % QoQ % YoY % QoQ % YoY % QoQ
Aditya Birla Fashion 226 Neutral 39,120 9.0 21.2 4,665 7.1 44.3 -514 PL Loss
Avenue Supermarts 4066 Buy 1,35,911 17.5 7.7 11,323 17.3 12.7 7,141 21.1 14.6
Barbeque Nation 667 Neutral 3,332 1.5 10.4 550 -11.3 23.9 -36 PL Loss
Bata India 1638 Neutral 9,496 5.5 15.9 2,545 23.5 40.1 1,166 40.3 81.8
Campus Activewear 285 Buy 4,945 6.2 91.2 1,199 30.5 390.1 715 48.0 22,250.9
Devyani Intl. 192 Buy 8,737 10.5 6.6 1,766 1.6 11.3 401 -49.8 31.9
Jubilant Foodworks 562 Buy 14,878 13.0 10.6 3,677 26.8 31.0 1,377 55.5 90.9
Metro Brands 1246 Buy 7,207 20.4 29.7 2,396 16.8 54.3 1,300 15.0 93.7
Raymond 1738 Buy 24,087 11.1 6.9 3,591 12.5 14.1 2,069 98.1 18.1
Relaxo Footwear 901 Neutral 7,464 9.6 4.3 903 25.1 -1.3 389 29.4 -11.9
Restaurant Brands 115 Buy 4,536 22.7 0.0 687 43.6 8.4 -40 Loss Loss
Sapphire Foods 1409 Buy 6,763 13.5 5.2 1,240 6.3 7.7 204 -37.5 34.4
Shoppers Stop 684 Neutral 11,918 5.3 16.3 2,235 5.4 39.9 512 -17.5 666.0
Titan Company 3675 Buy 1,45,286 25.1 16.0 18,570 37.9 31.6 13,143 44.1 43.6
Trent 3000 Buy 34,744 60.0 20.2 5,907 76.0 28.2 3,191 98.3 10.2
V-Mart Retail 2022 Neutral 8,890 14.4 61.8 986 -4.9 14,610 84 -58.1 LP
Vedant Fashions 1277 Neutral 5,062 14.7 131.9 2,622 16.8 182.6 1,743 16.0 257.8
Westlife Foodworld 819 Neutral 6,546 7.1 6.5 1,080 5.7 10.0 305 -16.2 36.2
Retail 4,78,923 19.4 14.5 65,942 24.2 32.4 33,149 32.0 58.7

Exhibit 2: Relative performance – three-months (%) Exhibit 3: Relative performance – one-year (%)
Nifty Index MOFSL Retail Index Nifty Index MOFSL Retail Index
118 128

112 116

106 104

100 92
94
80
Oct-23

Dec-23
Sep-23

Nov-23

Mar-23

Jun-23
Dec-22

Dec-23
Sep-23

Source: Bloomberg, MOFSL Source: Bloomberg, MOFSL

January 2024 213

 December 2023 Results Preview | Sector: Retail

Exhibit 4: Aggregate revenue growth (INR b; YoY %) Exhibit 5: Expected revenue growth in 3QFY24 (YoY %)
Aggregate revenue (INR b) YoY growth (%)

60.0
68.6
58.2
41.8

22.7
20.4
17.5

22.4

14.7
14.4
23.4

13.5
13.0
11.1

10.5
18.7 20.3 18.4 20.7

9.6
17.5

9.0

7.1
6.2
5.5
5.3

1.5
1,120.8
781.8

761.9

799.7

873.5

928.2

916.3

946.7

2QFY24 1,026.8

Sapphire
Metro Brands

BBQ Nation

RBA
ABFRL

Raymond
Relaxo
Rel. Retail

Bata India

Westlife
TRENT

Vedant Fashions
VMART

Campus

Devyani
Jubiliant Foods
DMART
SHOP
3QFY22

4QFY22

1QFY23

2QFY23

3QFY23

4QFY23

1QFY24

3QFY24E
Source: Company, MOFSL Source: Company, MOFSL

Exhibit 6: Aggregate growth in gross profit (YoY %) Exhibit 7: Change in gross margin (YoY %)
Aggregate Gross Profit (INR b) 3QFY24E Gross Margin (%) Change in Gross Margin (bp)
Aggregate gross margin (%) 350 320
28.8

150 140150
28.7
28.7
29.2

28.6

10 0 0 -20 -10 40
28.3

28.2

-90 -90 -60 -70

28.1
27.7

27.4

58.7

73.3
53.8
14.9
40.9
44.5
24.7
35.2
58.3

54.0
57.9

43.1
66.0
70.9
76.9
68.6
70.1
66.8
290.0
170.5

219.6

209.0

233.5

249.7

267.5

259.4

271.7

321.9

BBQ Nation

RBA
ABFRL

Raymond
Relaxo
Rel. Retail

Bata India

Westlife
Sapphire
TRENT

Vedant Fashions
VMART

Campus

Devyani
Jubiliant Foods
Metro Brands
DMART
SHOP
2QFY22

3QFY22

4QFY22

1QFY23

2QFY23

3QFY23

4QFY23

1QFY24

2QFY24

3QFY24E

Source: Company, MOFSL Source: Company, MOFSL

Exhibit 8: Aggregate EBITDA trajectory (margin, %) Exhibit 9: Aggregate PAT trajectory (YoY %)
Aggregate EBITDA (INR b) Aggregate EBITDA margin (%) Aggregate PAT (INR b) YoY growth (%)
733.0
10.0
9.7
9.4 9.4
9.1 9.2 9.1
8.9 8.9
8.6 96.3 66.4 49.2 -0.7 -6.8 27.5 -1.7 24.3
109.1
86.8
54.9

77.9

69.2

75.4

77.7

78.9

87.1

93.3

33.7 30.0 31.4 32.2 33.4 28.0 40.1 31.7 41.6

1QFY23
3QFY22

4QFY22

2QFY23

3QFY23

4QFY23

1QFY24

2QFY24

3QFY24E
3QFY23
2QFY22

3QFY22

4QFY22

1QFY23

2QFY23

4QFY23

1QFY24

2QFY24

3QFY24E

Source: Company, MOFSL Source: Company, MOFSL

January 2024 214

 December 2023 Results Preview | Sector: Retail

Exhibit 10: Retail coverage – KPI snapshot

3QFY22 4QFY22 1QFY23 2QFY23 3QFY23 4QFY23 1QFY24 2QFY24 3QFY24E
Total store count
Madura EBOs 2,488 2,522 2,585 2,561 2,601 2,650 2,643 2,660 2,746
Pantaloons 361 377 375 396 406 431 434 439 454
DMart 263 284 294 302 306 324 327 336 341
Shoppers Stop 83 88 90 91 96 98 98 102 105
Westside 197 200 203 208 211 214 221 223 228
Zudio 177 233 247 285 326 352 388 411 441
V-Mart 374 380 391 405 414 423 431 437 454
Vedant Fashions 566 583 603 626 640 649 662 669 689
Store additions
Madura EBOs -266 34 63 -24 40 49 -7 17 86
Pantaloons 14 16 -2 21 10 25 3 5 15
DMart 17 21 10 8 4 18 3 9 5
Shoppers Stop 3 5 2 1 5 2 0 4 3
Westside 6 3 3 5 3 3 7 2 5
Zudio 30 56 14 38 41 26 36 23 30
V-Mart 6 6 11 14 9 9 8 6 17
Vedant Fashions 31 17 20 23 14 9 13 7 20
Total store additions -159 158 121 86 126 141 63 73 181
Source: Company, MOFSL

Exhibit 11: Comparative valuation

CMP EPS (INR) PE (x) PB (x) ROE (%)
Company Name INR Reco FY24E FY25E FY26E FY24E FY25E FY26E FY24E FY25E FY26E FY24E FY25E FY26E
Retail 95.8 71.1 54.7 15.5 13.2 11.1 16.1 18.6 20.3
Aditya Birla Fashion 226 Neutral -6.3 -5.6 -7.1 -36.0 -40.4 -31.9 5.5 6.3 7.9 -16.9 -14.6 -22.1
Avenue Supermarts 4,066 Buy 40.9 56.3 74.8 99.3 72.3 54.4 14.1 11.8 9.7 15.3 17.7 NA
Barbeque Nation 667 Neutral -6.8 3.2 5.1 -97.9 205.9 130.3 6.9 6.7 6.4 -7.1 3.3 4.9
Bata India 1,638 Neutral 27.7 35.3 47.0 59.2 46.4 34.8 11.9 9.5 7.5 22.2 22.8 24.0
Campus Activewear 285 Buy 4.1 4.3 6.6 69.0 66.5 42.9 12.9 10.8 8.6 18.6 16.2 20.1
Devyani Intl. 192 Buy 1.2 2.1 2.7 157.9 91.9 70.0 21.5 17.4 13.9 14.3 20.9 22.1
Jubilant Foodworks 562 Buy 5.6 7.5 9.1 99.6 74.4 61.7 15.4 16.8 3.3 15.4 22.5 27.1
Metro Brands 1,246 Buy 13.3 18.5 22.8 93.3 67.3 54.6 18.6 15.8 13.3 21.8 26.0 27.1
Raymond 1,738 Buy 111.0 127.0 160.3 15.7 13.7 10.8 2.5 2.1 1.8 19.7 16.8 17.9
Relaxo Footwear 901 Neutral 8.6 13.7 19.7 104.9 65.6 45.8 11.1 9.9 8.5 11.0 16.0 19.9
Restaurant Brands 115 Buy -2.5 -0.9 2.1 -46.0 -128.6 54.2 7.9 8.4 7.3 -15.8 -6.3 14.4
Sapphire Foods 1,409 Buy 15.9 27.1 40.7 88.8 52.0 34.7 6.6 5.9 5.0 7.7 11.9 15.6
Shoppers Stop 684 Neutral 11.8 20.9 21.6 58.1 32.7 31.6 17.5 11.4 8.4 35.3 42.3 30.6
Titan Company 3,675 Buy 46.5 54.9 67.8 79.0 66.9 54.2 22.2 18.4 15.2 31.1 30.2 30.8
Trent 3,000 Buy 25.3 35.1 46.0 119 85 65.2 28.5 21.0 15.6 29.5 30.3 29.4
V-Mart Retail 2,022 Neutral -58.7 18.2 55.9 -34 111 36.2 4.9 4.7 4.2 NM 4.3 12.3
Vedant Fashions 1,277 Neutral 18.2 22.4 27.2 70 57 46.9 19.2 16.1 13.4 28.8 29.7 27.7
Westlife Foodworld 819 Neutral 7.6 11.9 16.9 107.3 68.8 48.4 18.6 14.7 11.2 19.0 23.9 26.3

January 2024 215

 December 2023 Results Preview | Sector: Retail

The tables below provide a snapshot of actual and estimated numbers for companies under the MOFSL Coverage
Universe. Highlighted columns indicate the quarter/financial year under review.

Aditya Birla Fashion Neutral

CMP: INR226 | TP: INR230 (+2%) EPS CHANGE (%): FY24|25: NM|NM
 Expect revenue growth to remain moderate at 9% YoY  EBITDA margin to contract marginally YoY to 11.9% due
 Revenue growth in Madura/Pantaloons to remain to weak demand and funding for its new business
moderate at 9%/5% YoY due to persistent demand  Madura/Pantaloons expected to add 86/15 EBO stores in
pressure 3QFY24.
Consolidated - Quarterly Earning (INR m)
Y/E March FY23 FY24E FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
Revenue 28,748 30,746 35,888 28,797 31,961 32,264 39,120 31,889 1,24,179 1,35,095
YoY Change (%) 254.1 49.7 20.1 26.1 11.2 4.9 9.0 10.7 52.6 8.8
Total Expenditure 24,063 26,779 31,532 26,869 29,037 29,031 34,455 29,737 1,09,243 1,22,261
EBITDA 4,684 3,967 4,356 1,928 2,923 3,233 4,665 2,151 14,936 12,835
Change, YoY (%) -377.6 26.5 -25.2 -48.3 -37.6 -18.5 7.1 11.6 35.8 -14.1
Depreciation 2,703 2,907 3,175 3,485 3,670 3,888 3,895 4,011 12,270 15,465
Interest 944 1,036 1,321 1,422 1,873 2,084 1,746 1,282 4,724 6,985
Other Income 311 220 269 364 603 457 291 -187 1,165 1,165
PBT 1,349 245 129 -2,615 -2,017 -2,281 -686 -3,329 -893 -8,451
Tax 411 -56 62 -646 -397 -282 -171 -1,262 -230 -2,113
Rate (%) 30.4 -23.0 48.3 24.7 19.7 12.4 25.0 37.9 25.7 25.0
Reported PAT 938 301 67 -1,969 -1,620 -1,999 -514 -2,067 -663 -6,338
Adj PAT 938 301 67 -1,969 -1,620 -1,999 -514 -2,067 -663 -6,338
YoY Change (%) -126.7 411.2 -96.6 -740.1 -272.7 -763.8 -871.0 5.0 -45.1 855.8
E: MOFSL Estimates

Avenue Supermarts Buy

CMP: INR4,066| TP: INR4,700 (+16%) EPS CHANGE (%): FY24|25: -1.7|-2.9
 Consolidated revenue expected to grow 17% YoY to  DMART added five stores in 3QFY24, taking its total store
INR136b count to 341
 Standalone revenue/sqft grew 4% YoY to ~INR37,800  We expect annual store additions of 38 in FY24
Consolidated - Quarterly Earning (INR b)
Y/E March FY23 FY24E FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q
Revenue 100.4 106.4 115.7 105.9 118.7 126.2 135.9 136.9 428.4 517.7
YoY Change (%) 93.7 36.6 25.5 20.6 18.2 18.7 17.5 29.2 38.3 20.9
Total Expenditure 90.3 97.5 106.0 98.2 108.3 116.2 124.6 125.9 392.0 475.0
EBITDA 10.1 8.9 9.7 7.7 10.4 10.0 11.3 11.0 36.4 42.8
EBITDA margin (%) 10.0 8.4 8.3 7.3 8.7 8.0 8.3 8.1 8.5 8.3
Change YoY (%) 349.7 33.4 11.4 4.4 2.7 12.7 17.3 43.0 45.6 17.6
Depreciation 1.4 1.6 1.7 1.6 1.6 1.7 1.8 2.0 6.4 7.2
Interest 0.2 0.2 0.2 0.2 0.1 0.2 0.2 0.3 0.7 0.7
Other Income 0.3 0.4 0.3 0.3 0.4 0.4 0.4 0.5 1.3 1.7
PBT 8.8 7.5 8.1 6.2 9.0 8.5 9.8 9.2 30.6 36.5
Tax 2.3 0.6 2.2 1.6 2.4 2.3 2.6 2.5 6.8 9.9
Rate (%) 26.6 8.3 27.4 26.4 26.6 26.8 27.0 27.6 22.3 27.0
Reported PAT 6.4 6.9 5.9 4.6 6.6 6.2 7.1 6.7 23.8 26.6
Adj PAT 6.4 5.4 5.9 4.6 6.6 6.2 7.1 6.7 22.4 26.6
YoY Change (%) 574.2 30.4 6.7 7.8 2.5 14.4 21.1 45.1 49.9 19.0
E: MOFSL Estimates

January 2024 216

 December 2023 Results Preview | Sector: Retail

Barbeque Nation Hospitality Neutral

CMP: INR667 | TP: INR700 (+5%) EPS CHANGE (%): FY24|25: NM|-63
 Revenue growth is expected to be flat YoY led by weak  On YoY basis, EBITDA margin could be hurt by weak
demand revenue and higher RM costs
 Expect to reduce one store in 3QFY24 on net, and SSS  Expect the company to deliver PAT of INR36m for 3QFY24
may decline 7%.
Quarterly Performance (INR m)
Y/E March FY23 FY24E FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q
SSSG (%) 182.0 23.4 -1.2 -2.6 -7.7 -10.7 -7.0 2.3 27.5 -6.0
No. of stores 195 205 212 216 212 212 217 227 216 221
Net Sales 3,149 3,105 3,282 2,802 3,239 3,017 3,332 3,110 12,338 12,697
YoY change (%) 208.8 40.6 14.5 11.6 2.9 -2.8 1.5 11.0 43.4 2.9
Gross Profit 2,103 2,051 2,189 1,843 2,073 1,990 2,199 2,056 8,186 8,317
Margin (%) 66.8 66.1 66.7 65.8 64.0 65.9 66.0 66.1 66.3 65.5
EBITDA 705 583 620 399 468 444 550 475 2,306 1,936
EBITDA growth % N/M 41.1 -5.7 -10.5 -33.6 -23.9 -11.3 19.2 72.4 -16.0
Margin (%) 22.4 18.8 18.9 14.2 14.4 14.7 16.5 15.3 18.7 15.3
Depreciation 352 350 382 366 375 443 443 442 1,450 1,703
Interest 175 180 183 180 187 195 195 163 717 741
Other Income 30 16 12 22 40 43 40 38 80 161
PBT 208 69 67 -125 -55 -151 -48 -93 219 -347
Tax 48 26 17 -26 -14 -32 -12 -23 66 -82
Rate (%) 23.1 38.3 25.7 20.7 26.1 21.3 25.0 25.0 30.1 23.5
Adjusted PAT 160 43 50 -99 -41 -119 -36 -70 153 -265
YoY change (%) N/M 39.2 -66.1 -2,138.8 -125.3 -379.2 -173.0 -29.9 - -273.3
E: MOFSL Estimates

Bata India Neutral

CMP: INR1,638| TP: INR1,620 (-1%) EPS CHANGE (%): FY24|25: 0.0|0.0
 Expect 5% YoY growth in revenue to INR9.5b for 3QFY24  Expect PAT margin to increase to 12%
 EBITDA margin to improve 390bp YoY to 26.8%, aided by
revenue growth
Consolidated - Quarterly Earning (INR m)
Y/E March FY23 FY24E FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q
Revenue 9,430 8,298 9,002 7,786 9,581 8,191 9,496 8,105 34,516 35,373
YoY Change (%) 253.1 35.1 7.0 17.0 1.6 -1.3 5.5 4.1 44.6 2.5
Gross Profit 5,339 4,562 4,931 4,547 5,246 4,755 5,531 4,630 19,379 20,163
Gross margin% 56.6 55.0 54.8 58.4 54.7 58.1 58.2 57.1 56.1 57.0
Total Expenditure 6,983 6,688 6,941 5,966 7,186 6,375 6,951 6,195 26,579 26,707
EBITDA 2,447 1,609 2,061 1,820 2,395 1,817 2,545 1,910 7,936 8,666
EBITDA margin 25.9 19.4 22.9 23.4 25.0 22.2 26.8 23.6 23.0 24.5
Change YoY (%) -876.5 35.0 22.2 12.2 -2.1 12.9 23.5 5.0 89.6 9.2
Depreciation 693 736 754 765 811 817 824 827 2,948 3,278
Interest 249 272 286 272 281 284 286 291 1,078 1,143
Other Income 93 119 75 99 133 155 119 94 386 501
PBT before EO expense 1,597 720 1,096 882 1,436 870 1,555 886 4,296 4,747
Extra-Ord expense 0 0 0 0 0 409 0 0 0 409
PBT 1,597 720 1,096 882 1,436 461 1,555 886 4,296 4,338
Tax 404 172 265 226 367 121 389 208 1,067 1,084
Rate (%) 25.3 23.9 24.2 25.6 25.5 26.3 25.0 23.5 24.8 25.0
Reported PAT 1,194 548 831 656 1,069 340 1,166 678 3,229 3,253
Adj PAT 1,194 548 831 656 1,069 641 1,166 678 3,229 3,555
YoY Change (%) -272 47 15 4 -10 17 40 3 213 10
Margins (%) 13% 7% 9% 8% 11% 8% 12% 8% 9% 10%
E: MOFSL Estimates

January 2024 217

 December 2023 Results Preview | Sector: Retail

Campus Activewear Buy

CMP: INR285| TP: INR300 (+5%) EPS CHANGE (%): FY24|25: +8.5|+2.3
 Revenue growth likely to remain moderate at 6% YoY  EBITDA margin to expand ~460bp YoY aided by improved
due to weak demand environment gross margin.
 Expect volume and ASP growth of 3% YoY in 3QFY24.  Expect PAT to spike YoY led by improved operating
margin.
Consolidated - Quarterly Earning (INR m)
Y/E March FY23 FY24E FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q
Revenue 3,377 3,332 4,656 3,478 3,538 2,587 4,945 3,736 14,842 14,805
YoY Change (%) 149.6 22.0 7.4 -1.3 4.8 -22.4 6.2 7.4 24.3 -0.3
Gross Profit 1,676 1,594 2,265 1,787 1,888 1,406 2,670 1,943 7,323 7,907
Gross margin 49.6 47.9 48.6 51.4 53.4 54.3 54.0 52.0 49.3 53.4
Total Expenditure 2,760 2,897 3,737 2,912 2,876 2,342 3,746 3,191 12,307 12,155
EBITDA 617 434 919 565 662 245 1,199 545 2,536 2,651
EBITDA margins (%) 18.3 13.0 19.7 16.3 18.7 9.5 24.3 14.6 17.1 17.9
Depreciation 145 170 196 200 171 181 185 189 710 726
Interest 56 76 82 72 69 65 65 68 287 267
Other Income 6 7 9 6 2 4 4 17 28 27
PBT 422 196 650 299 424 4 954 304 1,567 1,685
Tax 109 50 167 70 109 1 238 73 396 421
Rate (%) 25.8 25.7 25.7 23.3 25.8 13.5 25.0 24.1 25.2 25.0
Reported PAT 313 145 483 229 315 3 715 231 1,171 1,264
Adj PAT 313 145 483 229 314 3 715 231 1,171 1,264
YoY Change (%) 1,467 -49 -12 0 1 -98 48 1 8.7 7.9
E: MOFSL Estimates

Devyani International Buy

CMP: INR192 | TP: INR220 (+14%) EPS CHANGE (%): FY24|25: -14|-5
 Expect KFC/PH store adds of 30/20 for 3QFY24  Pizza Hut’s SSS could decline 13%, while KFC is likely to
 Revenue likely to grow 10.5%, mainly driven by footprint report flat SSSG.
additions, partially offset by weak SSSG in the pizza  Pre Ind AS EBITDA likely to contract by 150bp YoY due to
category. operating deleverage.
Quarterly Performance (INR m)
Y/E March FY23 FY24E FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q
KFC - No. of stores 391 423 461 490 510 540 570 600 490 610
PH - No. of stores 436 466 483 506 521 535 555 576 506 576
KFC - SSSG (%) 63.6 13.0 3.0 1.9 -0.9 -3.9 0.0 2.8 16.0 -0.5
PH - SSSG (%) 31.5 2.9 -6.1 -3.2 -5.3 -10.4 -13.0 -0.5 4.4 -7.5
Net Sales 7,047 7,474 7,906 7,550 8,466 8,195 8,737 8,740 29,977 34,138
YoY change (%) 99.8 44.8 26.6 27.8 20.1 9.6 10.5 15.8 43.8 13.9
Gross Profit 5,010 5,246 5,482 5,254 5,998 5,802 6,190 6,189 20,991 24,179
Margin (%) 71.1 70.2 69.3 69.6 70.8 70.8 70.9 70.8 70.0 70.8
EBITDA 1,647 1,655 1,739 1,513 1,734 1,588 1,766 1,679 6,551 6,768
EBITDA growth % 167.5 34.2 17.7 8.3 5.3 -4.1 1.6 11.0 21.9 3.3
Margin (%) 23.4 22.1 22.0 20.0 20.5 19.4 20.2 19.2 21.9 19.8
Depreciation 637 660 706 784 796 863 881 895 2,788 3,435
Interest 328 348 378 420 404 417 442 505 1,475 1,767
Other Income 90 45 81 110 68 66 83 115 326 333
PBT 771 692 736 419 603 373 527 395 2,614 1,899
Tax 24 19 -62 -186 146 70 127 95 -206 437
Rate (%) 3.1 2.8 -8.5 -44.5 24.1 18.7 24.0 24.0 -7.9 23.0
Adjusted PAT 748 672 798 606 457 304 401 301 2,820 1,462
Margin (%) 10.6 9.0 10.1 8.0 5.4 3.7 4.6 3.4 9.4 4.3
YoY change (%) L/P 58.3 22.0 -22.9 -38.8 -54.8 -49.8 -50.4 18.9 -48.2
E: MOFSL Estimates

January 2024 218

 December 2023 Results Preview | Sector: Retail

Jubilant FoodWorks Buy

CMP: INR562 | TP: INR630 (+12%) EPS CHANGE (%): FY24|25: -6.5|-5.4
 LFL for 3QFY24 is expected at +5%  We expect net additions of 65 Domino’s outlets in 3QFY24
 GM to increase to 76.9% due to RM cool off  Revenue growth likely at 13% YoY due to store additions
and SSSG
Quarterly Standalone Perf. (INR m)
Y/E March FY23 FY24E FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q
No of stores (Dominos) 1,625 1,701 1,760 1,816 1,838 1,888 1,953 2,016 1,816 2,016
LFL growth (%) 28.3 8.4 0.3 -0.6 -1.3 -1.3 5.0 5.5 8.9 2.0
Net Sales 12,403 12,868 13,166 12,523 13,097 13,448 14,878 13,976 50,960 55,399
YoY change (%) 41.1 16.9 10.3 8.2 5.6 4.5 13.0 11.6 15.9 8.7
Gross Profit 9,514 9,811 9,937 9,426 9,956 10,275 11,444 10,760 38,688 42,435
Gross margin (%) 76.7 76.2 75.5 75.3 76.0 76.4 76.9 77.0 75.9 76.6
EBITDA 3,045 3,125 2,900 2,522 2,764 2,807 3,677 2,981 11,592 12,229
EBITDA growth % 44.0 9.2 -8.6 -12.9 -9.2 -10.2 26.8 18.2 4.5 5.5
Margins (%) 24.6 24.3 22.0 20.1 21.1 20.9 24.7 21.3 22.7 22.1
Depreciation 1,050 1,123 1,298 1,282 1,328 1,379 1,396 1,410 4,753 5,514
Interest 459 485 501 505 513 534 540 550 1,951 2,137
Other Income 106 103 93 195 91 69 99 139 497 398
PBT 1,642 1,619 1,194 930 1,014 963 1,841 1,160 5,385 4,977
Tax 366 428 309 254 262 241 464 287 1,356 1,254
Rate (%) 22.3 26.4 25.8 27.4 25.8 25.1 25.2 24.8 25.2 25.2
Adjusted PAT 1,276 1,192 886 675 752 721 1,377 872 4,029 3,723
YoY change (%) 87.3 -2.9 -35.5 -42.0 -41.1 -39.5 55.5 29.2 -7.6 -7.6
E: MOFSL Estimates

Metro Brands Buy

CMP: INR1,246 | TP: INR1,530 (+23%) EPS CHANGE (%): FY24|25: -1.0|0.0
 Revenue to grow 20% YoY to INR7.2b, led by footprint  Expect EBITDA margin to contract 100bp YoY to 33.3%
additions due to Fila acquisition
 Expect to add 28 stores in 3QFY24, taking the total count
to 845
Consolidated - Quarterly Earning (INR m)
Y/E March FY23 FY24E FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q
Revenue 5,080 4,763 5,987 5,441 5,825 5,557 7,207 6,350 21,271 24,939
YoY Change (%) 286.6 46.7 23.8 35.0 14.7 16.7 20.4 16.7 58.4 17.2
Total Expenditure 3,251 3,292 3,935 4,006 3,959 4,003 4,811 4,746 14,483 17,520
EBITDA 1,829 1,472 2,052 1,436 1,866 1,554 2,396 1,603 6,788 7,419
EBITDA Margin (%) 36.0 30.9 34.3 26.4 32.0 28.0 33.3 25.3 31.9 29.8
Depreciation 390 414 504 502 543 572 593 605 1,810 2,312
Interest 134 148 173 175 185 197 201 221 631 804
Other Income 93 118 146 187 144 162 153 140 544 599
PBT 1,397 1,027 1,521 946 1,282 946 1,756 917 4,891 4,902
Tax 345 253 394 267 353 275 457 189 1,257 1,274
Rate (%) 24.7 24.6 25.9 28.2 27.5 29.1 26.0 20.6 25.7 26.0
MI & Profit/Loss of Asso. Cos. 5 5 2 8 0 0 0 0 20 0
PAT before MI 1,052 774 1,128 680 929 671 1,300 728 3,634 3,627
Adj PAT post MI 1,058 779 1,130 688 929 671 1,300 728 3,654 3,627
YoY Change (%) -973 41 11 -1 -12 -14 15 6 70.4 -0.7
E: MOFSL Estimates

January 2024 219

 December 2023 Results Preview | Sector: Retail

Raymond Buy
CMP: INR1,738| TP: INR2,500 (+44%) EPS CHANGE (%): FY24|25: 0.0|0.0
 Expect revenue to grow 11% YoY driven by healthy  EBITDA margin to expand on YoY basis, aided by scale
growth in branded apparels benefits and improved GM
 Gross margins to improve to 43.1% for 3QFY24
Quarterly Earnings (INR m)
Y/E March FY23 FY24E FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
Total Revenue 17,281 21,682 21,682 21,502 17,715 22,534 24,087 24,770 82,147 89,105
YoY % 109% 40% 18% 10% 3% 4% 11% 15% 33% 8%
Total expenditure 15,197 18,333 18,490 18,134 15,748 19,388 20,496 20,377 70,153 76,009
EBITDA 2,085 3,350 3,192 3,368 1,966 3,146 3,591 4,393 11,994 13,096
EBITDA margin (%) 12.1% 15.4% 14.7% 15.7% 11.1% 14.0% 14.9% 17.7% 14.6% 14.7%
Depreciation and amortization 584 575 578 616 597 654 685 685 2,354 2,621
Finance Costs 591 634 705 643 795 893 799 799 2,573 3,285
Other income 263 226 314 420 550 673 677 677 1,223 2,576
Exceptional items 0 96 45 930 94 230 0 0 1,072 324
Profit before Tax 1,172 2,271 2,177 1,599 1,030 2,042 2,784 3,586 7,219 9,443
Tax 365 709 1,161 -231 267 507 702 904 2,004 2,380
Profit after Tax 807 1,562 1,017 1,830 763 1,535 2,082 2,683 5,216 7,063
Margin (%) 4.7% 7.2% 4.7% 8.5% 4.3% 6.8% 8.6% 10.8% 6.3% 7.9%
Minority Interest -10 -31 -18 -21 -15 -14 -14 -14 -80 -56
Share of Profit in Associated Companies 12 57 -51 135 9,904 77 0 0 154 9,981
Net Income 809 1,589 948 1,944 10,653 1,598 2,069 2,669 5,289 16,988
Adjusted income 797 1,627 1,044 2,739 842 1,751 2,069 2,669 6,207 7,331
Margin (%) 4.7% 7.3% 4.4% 9.0% 60.1% 7.1% 8.6% 10.8% 6.4% 19.1%

Relaxo Footwear Neutral

CMP: INR901| TP: INR980 (+9%) EPS CHANGE (%): FY24|25: -12|0
 Expect revenue to grow 20% YoY because of improved  Expect improvement in EBITDA margin YoY, aided by
volumes scale benefits and improved GM
 ASP likely to decline YoY due to price cuts by the  Expect 29% YoY growth in PAT to INR389m
company
Consolidated - Quarterly Earning (INR m)
Y/E March FY23 FY24E FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q
Gross Sales 6,672 6,697 6,810 7,649 7,388 7,153 7,464 8,460 27,827 30,465
YoY Change (%) 34.2 -6.3 -8.4 9.6 10.7 6.8 9.6 10.6 4.9 9.5
Total RM Cost 3,063 3,422 3,199 3,660 3,151 3,013 3,142 3,642 13,343 12,947.8
Gross Profit 3,609 3,275 3,611 3,990 4,237 4,140 4,322 4,818 14,484 17,518
Margins (%) 54.1 48.9 53.0 52.2 57.4 57.9 57.9 57.0 52.1 57.5
Total Expenditure 5,810 6,102 6,088 6,470 6,313 6,238 6,561 7,043 24,470 26,155
EBITDA 861 594 722 1,180 1,076 915 903 1,417 3,358 4,311
Margins (%) 12.9 8.9 10.6 15.4 14.6 12.8 12.1 16.7 12.1 14.2
Depreciation 298 305 320 328 346 369 377 373 1,251 1,465
Interest 69 41 41 41 45 47 47 41 192 180
Other Income 42 57 44 43 73 105 40 -32 186 186
PBT 536 304 406 854 758 604 519 970 2,100 2,851
Tax 149 80 105 221 195 162 130 227 555 713
Rate (%) 27.8 26.3 25.8 25.9 25.7 26.8 25.0 23.3 26.4 25.0
Reported PAT 387 224 301 633 563 442 389 744 1,545 2,138
Adj PAT 387 224 301 633 563 442 389 744 1,545 2,138
YoY Change (%) 24.9 -67.3 -57.1 0.6 45.6 97.0 29.4 17.5 -33.6 38.4
Margins (%) 5.8 3.3 4.4 8.3 7.6 6.2 5.2 8.8 5.6 7.0
E: MOFSL Estimates

January 2024 220

 December 2023 Results Preview | Sector: Retail

Restaurants Brand Asia Buy

CMP: INR125 | TP: INR140 (+22%) EPS CHANGE (%): FY24|25: NM|NM
 Expect SSSG of 3.5% for 3QFY24 with 53 store adds  EBITDA margin is anticipated to improve, led by better
store productivity
 Revenue likely to grow 23% YoY to INR4.4b  Expect net losses of India to narrow to INR40m
Quarterly Standalone Performance (INR m)
Y/E March FY23 FY24E FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q
SSSG (%) 66.0 27.0 8.6 8.3 3.6 3.5 3.5 5.4 23.1 4.0
No. of stores 328 334 379 391 396 404 457 460 391 460
Net Sales 3,369 3,680 3,698 3,649 4,221 4,535 4,536 4,587 14,397 17,879
YoY change (%) 125.0 50.0 32.1 35.8 25.3 23.2 22.7 25.7 127.5 112.5
Gross Profit 2,236 2,443 2,454 2,422 2,806 3,031 3,030 3,112 9,555 11,979
Margin (%) 66.4 66.4 66.4 66.4 66.5 66.8 66.8 67.8 66.4 67.0
EBITDA 332 421 479 423 485 634 687 715 1,654 2,521
EBITDA growth % 2,064.8 64.4 45.8 39.8 45.9 50.7 43.6 69.1 109.4 142.4
Margin (%) 9.9 11.4 12.9 11.6 11.5 14.0 15.2 15.6 11.5 14.1
Depreciation 461 426 434 481 507 494 494 800 1,802 2,296
Interest 196 206 220 274 264 273 273 299 896 1,109
Other Income 97 79 63 86 65 40 40 72 325 217
Adjusted PAT -227 -133 -112 -246 -222 -93 -40 -312 -718 -667
YoY change (%) 12.4 -12.5 -15.1 NM -2.6 -29.6 -63.9 26.9 87.6 -7.6
E: MOFSL Estimates

Sapphire Foods Buy

CMP: INR1,453 | TP: INR1,700 (+21%) EPS CHANGE (%): FY24|25: -11|+1
 KFC likely to deliver flat SSSG along with 20 store additions  PH’s LFL decline is expected to widen to 15% with 8 store
additions
 Revenue growth expected at 13.5% to INR6.8b  EBITDA margin to contract 110bp YoY to 11.3% due to
lower productivity and higher opex
Quarterly Performance (INR m)
Y/E March FY23 FY24E FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q
KFC - No. of stores 281 301 325 341 358 381 401 421 341 421
PH - No. of stores 235 249 274 286 302 311 319 331 286 331
KFC - SSSG (%) 65.0 15.0 3.0 2.0 0.0 0.0 0.0 9.8 15.0 2.5
PH - SSSG (%) 47.0 23.0 -4.0 -4.0 -9.0 -20.0 -15.0 21.1 12.0 -6.5
Net Sales 5,463 5,628 5,961 5,604 6,544 6,426 6,763 7,786 22,656 27,520
YoY change (%) 80.3 35.9 17.5 12.8 19.8 14.2 13.5 38.9 31.6 21.5
Gross Profit 3,707 3,737 3,998 3,807 4,483 4,417 4,638 5,322 15,249 18,859
Margin (%) 67.9 66.4 67.1 67.9 68.5 68.7 68.6 68.4 67.3 68.5
EBITDA 1,104 1,032 1,167 981 1,214 1,151 1,240 1,365 4,284 4,971
EBITDA growth % 223.9 82.2 1.9 -1.7 10.0 11.6 6.3 39.1 40.4 16.0
Margin (%) 20.2 18.3 19.6 17.5 18.6 17.9 18.3 17.5 18.9 18.1
Depreciation 609 628 681 724 727 768 791 763 2,642 3,048
Interest 197 206 217 249 226 245 252 238 869 960
Other Income 59 71 67 114 75 75 75 157 311 382
PBT 356 269 336 123 336 214 273 522 1,084 1,345
Tax -25 1 9 -1,232 88 62 68 119 -1,248 336
Rate (%) -7.1 0.3 2.6 NA 26.0 28.9 25.0 22.7 -115.1 25.0
Adjusted PAT 381 269 327 102 249 152 204 403 1,079 1,009
YoY change (%) L/P L/P -35.9 -61.6 -34.8 -43.4 -37.5 296.1 134.6 -6.5
E: MOFSL Estimates

January 2024 221

 December 2023 Results Preview | Sector: Retail

Shoppers Stop Neutral

CMP: INR684| TP: INR675 (-1%) EPS CHANGE (%): FY24|25: -29.4|-20.9
 
 Expect moderate revenue growth of 5.3% YoY mainly Expect to add 4 departmental stores in 2QFY24,
driven by footprint additions and share from In-Tune taking the total store count to 101
 Revenue from the Beauty space to grow 8% YoY in 3QFY24
Standalone - Quarterly Earning (INR m)
Y/E March FY23 FY24E FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q
Total Revenue from Operations 9,419 10,082 11,317 9,165 9,816 10,252 11,918 10,268 39,984 42,253
YoY Change (%) 368.4 59.6 19.0 29.1 4.2 1.7 5.3 12.0 60.3 5.7
Total Expenditure 7,795 8,411 9,196 7,594 8,093 8,654 9,684 8,439 32,996 34,869
EBITDA 1,624 1,672 2,121 1,571 1,723 1,598 2,235 1,829 6,988 7,385
EBITDA Margin (%) 17.2 16.6 18.7 17.1 17.6 15.6 18.8 17.8 17.5 17.5
Depreciation 846 927 999 1,044 1,050 1,081 1,095 1,154 3,816 4,379
Interest 511 514 515 551 541 548 563 601 2,092 2,253
Other Income 56 39 244 222 73 105 105 277 561 561
PBT before EO expense 323 270 851 197 204 74 682 352 1,641 1,313
Extra-Ord expense 0 20 0 0 0 -49 0 0 20 -49
PBT 323 250 851 197 204 25 682 352 1,621 1,264
Tax 95 68 230 35 55 8 171 97 429 330
Rate (%) 29.5 27.3 27.1 17.6 26.9 29.9 25.0 27.7 26.4 26.1
Reported PAT 228 181 621 163 149 18 512 255 1,192 934
Adj PAT 228 201 621 163 149 67 512 255 1,212 983
YoY Change (%) -122.2 -766.9 23.7 -200.9 -34.4 -66.8 -17.5 56.7 -269.1 -19.0
E: MOFSL Estimates

Titan Company Buy

CMP: INR3,675 | TP: INR4,300 (+17%) EPS CHANGE (%): FY24|25: -2.7|-8.4
 We expect revenue growth of 25.1% YoY on account of  We anticipate the jewelry segment to grow by ~25.4%,
Wedding and the festive season. with a four-year revenue CAGR of 23.6%.
 GP margin is expected to increase 190bp YoY and 60bp  Outlook on international business expansion is a key
YoY respectively. monitorable.
Consolidated Quarterly Performance (INR b)
Y/E March FY23 FY24E FY23 FY24
1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
Net Sales 94.4 91.6 116.1 103.6 119.0 125.3 145.3 123.9 405.8 513.4
YoY change (%) 171.9 22.3 15.7 32.9 26.0 36.7 25.1 19.6 40.9 26.5
Gross Profit 24.1 25.3 27.7 25.1 26.4 29.3 37.4 33.6 102.2 126.7
Margin (%) 25.5 27.6 23.9 24.3 22.2 23.4 25.8 27.1 25.2 24.7
EBITDA 12.0 12.5 13.5 10.9 11.3 14.1 17.7 15.4 48.8 58.5
EBITDA growth % 773.0 28.8 -6.6 24.3 -5.9 13.2 31.1 41.8 42.5 19.8
Margin (%) 12.7 13.6 11.6 10.5 9.5 11.3 12.2 12.5 12.0 11.4
Depreciation 1.0 1.1 1.1 1.2 1.3 1.4 1.2 1.3 4.4 5.2
Interest 0.7 0.6 0.8 1.0 1.1 1.4 1.1 1.2 3.0 4.8
Other Income 0.4 0.6 0.9 1.1 1.1 1.2 1.1 1.1 3.1 4.6
PBT 10.7 11.4 12.4 9.9 10.0 12.5 16.4 14.1 44.5 53.0
Tax 2.8 3.1 3.3 2.5 2.5 3.4 4.0 3.2 11.7 13.0
Rate (%) 26.3 26.9 26.7 25.5 24.6 26.9 24.2 23.1 26.4 24.6
Adjusted PAT 7.9 8.4 9.1 7.4 7.6 9.2 12.4 10.8 32.7 39.9
YoY change (%) # 30.3 -9.9 11.0 -4.3 9.6 36.2 46.9 40.2 22.0
E: MOSL Estimates

January 2024 222

 December 2023 Results Preview | Sector: Retail

Trent Buy
CMP: INR3,000 | TP: INR3,300 (+10%) EPS CHANGE (%): FY24|25: 0.3|0.2
 Expect revenue growth momentum to sustain at 60% YoY,  Expect Westside/Zudio to add 5/30 stores in 3QFY24
led by robust SSSG and strong footprint additions
 Revenue from Westside to grow 25% YoY, Zudio revenues  EBITDA margin to improve YoY to 17%
expected to double YoY.
Standalone - Quarterly Earning (INR m)
Y/E March FY23 FY24E FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q
Revenue 16,529 18,136 21,715 20,772 25,364 28,907 34,744 34,451 77,152 1,23,467
YoY Change (%) 405.0 77.7 61.1 75.3 53.5 59.4 60.0 65.9 98.8 60.0
Total Expenditure 13,488 15,461 18,359 18,652 21,708 24,299 28,838 29,547 65,959 1,04,391
EBITDA 3,041 2,675 3,356 2,120 3,657 4,609 5,907 4,904 11,193 19,076
EBITDA Margin (%) 18.4 14.8 15.5 10.2 14.4 15.9 17.0 14.2 14.5 15.5
Depreciation 1,202 1,043 1,106 1,281 1,335 1,448 1,547 1,625 4,632 5,955
Interest 925 880 885 883 891 923 953 1,044 3,572 3,812
Other Income 415 1,680 730 1,291 498 1,511 848 848 4,117 3,705
PBT before EO expense 1,330 2,432 2,095 1,248 1,928 3,748 4,255 3,083 7,105 13,014
Extra-Ord expense 0 0 0 0 0 0 0 0 0 0
PBT 1,330 2,432 2,095 1,248 1,928 3,748 4,255 3,083 7,105 13,014
Tax 303 574 486 197 445 851 1,064 771 1,559 3,131
Reported PAT 1,026 1,859 1,610 1,051 1,483 2,897 3,191 2,313 5,546 9,883
Adj PAT 1,026 1,859 1,610 1,051 1,483 2,897 3,191 2,313 5,546 9,883
YoY Change (%) -222.5 37.1 21.1 40.2 44.5 55.9 98.3 120.0 113.5 78.2
E: MOFSL Estimates

V-Mart Retail Neutral

CMP: INR2,022 | TP: INR1,905 (-6%) EPS CHANGE (%): FY24|25: NM|17.2
 Consolidated revenue grew ~14% YoY mainly led by  Added 20 stores and closed 3 stores, taking the total
footprint adds store count to 454
 Excluding revenue from LimeRoad (~INR170m), the  EBITDA margin likely to contract due to lower SSSG in
company’s revenue grew 12% YoY. Unlimited and spending toward online business.
Consolidated - Quarterly Earning (INR m)
Y/E March FY23 FY24E FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q
Revenue 5,879 5,062 7,769 5,939 6,785 5,494 8,890 7,107 24,648 28,243
YoY Change (%) 231.4 49.8 12.3 29.5 15.4 8.5 14.4 19.7 47.9 14.6
Total Expenditure 4,992 4,526 6,732 5,710 6,261 5,488 7,904 6,981 21,959 26,633
EBITDA 887 536 1,037 229 525 7 986 126 2,689 1,610
EBITDA Margin (%) 15.1 10.6 13.3 3.9 7.7 0.1 11.1 1.8 10.9 5.7
Depreciation 402 441 473 484 499 532 532 374 1,800 1,937
Interest 247 279 307 336 330 359 359 249 1,169 1,297
Other Income 41 27 7 75 15 20 20 115 150 170
PBT 278 -157 264 -516 -290 -864 115 -382 -130 -1,454
Tax 74 -44 64 -146 -70 -223 31 -131 -52 -393
Rate (%) 26.5 27.9 24.4 28.3 24.2 25.8 27.0 34.2 39.7 27.0
Reported PAT 205 -113 200 -370 -219 -641 84 -251 -78 -1,061
Adj PAT 205 -113 200 -370 -219 -641 84 -251 -78 -1,028
YoY Change (%) -171.2 -20.0 -65.0 1,314.5 -207.3 466.8 -58.1 -32.1 -167.4 1,209.8
E: MOFSL Estimates

January 2024 223

 December 2023 Results Preview | Sector: Retail

Vedant Fashions Neutral

CMP: INR1,277| TP: INR1,240 (-5%) EPS CHANGE (%): FY24|25: -1.2|-0.6
 Revenue to grow 14.7% YoY with improved demand led  Expect PAT to improve to INR1.7b driven by improved
by festive period operating profits.
 EBITDA margin to improve YoY to 51.8%

Quarterly Earning (INR m)

Y/E March FY23 FY24E FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q
Revenue 3,250 2,469 4,414 3,416 3,116 2,183 5,062 4,082 13,549 14,444
YoY Change (%) 103.1 23.5 14.7 15.3 -4.1 -11.6 14.7 19.5 30.2 6.6
Total Expenditure 1,619 1,315 2,170 1,737 1,635 1,255 2,440 2,022 6,841 7,352
EBITDA 1,631 1,154 2,245 1,679 1,482 928 2,622 2,060 6,708 7,092
EBITDA margins (%) 50.2 46.7 50.9 49.1 47.5 42.5 51.8 50.5 49.5 49.1
Change YoY (%) 135.6 26.6 17.2 16.6 -9.1 -19.6 16.8 22.7 189.6 111.2
Depreciation 264 249 251 274 299 325 329 362 1,038 1,315
Interest 78 77 75 84 94 107 114 119 315 434
Other Income 71 97 100 134 150 151 151 111 402 563
PBT before EO expense 1,359 925 2,019 1,454 1,238 648 2,331 1,690 5,758 5,907
Extra-Ord expense 0 0 0 0 0 0 0 0 0 0
Tax 351 235 516 366 319 161 587 422 1,467 1,489
Rate (%) 25.8 25.4 25.5 25.2 25.7 24.8 25.2 25.0 25.5 25.2
Reported PAT 1,009 690 1,504 1,089 919 487 1,743 1,268 4,291 4,418
Adj PAT 1,009 690 1,504 1,089 919 487 1,743 1,268 4,291 4,418
YoY Change (%) 123 30 18 23 -9 -29 16 17 36 3
E: MOFSL Estimates

Westlife Development Neutral

CMP: INR934 | TP: INR860 (+5%) EPS CHANGE (%): FY24|25: -12.5|-4.3
 SSS to decline to 2% in 3QFY24  Expect revenue to grow 7% YoY to INR6.5b
 Expect to add 13 new stores in 3QFY24  EBITDA margin to decline slightly YoY to 16.5% led by
weak SSSG
Consolidated quarterly performance (INR m)
Y/E March FY23 FY24E FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q
SSSG % 97.0 40.0 20.0 14.0 7.0 1.0 -2.0 2.6 36.0 2.0
No. of McDonald's restaurants 331 337 341 357 361 370 383 402 357 402
Net Sales 5,379 5,724 6,115 5,564 6,145 6,147 6,546 6,638 22,782 25,477
YoY Change (%) 107.6 48.5 28.2 22.3 14.2 7.4 7.1 19.3 44.5 11.8
Gross profit 3,459 3,748 4,090 4,002 4,337 4,310 4,589 4,662 15,298 17,898
Margin (%) 64.3 65.5 66.9 71.9 70.6 70.1 70.1 70.2 67.2 70.3
EBITDA 873 959 1,022 887 1,042 982 1,080 1,112 3,740 4,216
YoY Change (%) 3,380.8 115.9 28.8 40.9 19.4 2.4 5.7 25.5 97.7 12.7
Margins (%) 16.2 16.8 16.7 15.9 16.9 16.0 16.5 16.8 16.4 16.6
Depreciation 358 366 386 412 428 439 448 456 1,522 1,772
Interest 215 225 234 253 260 274 274 218 927 1,026
Other Income 18 52 78 56 53 33 53 66 203 205
PBT 318 419 480 277 406 302 412 504 1,495 1,623
Tax 82 104 116 76 118 78 107 131 379 433
Rate (%) 25.8 24.8 24.2 27.5 29.0 25.9 25.9 25.9 25.3 26.7
Adj PAT 236 315 364 201 288 224 305 373 1,116 1,190
YoY Change (%) L/P L/P 74.7 31.2 22.3 -29.1 -16.2 85.6 L/P 6.6
Margins (%) 4.4 5.5 5.9 3.6 4.7 3.6 4.7 5.6 4.9 4.7
E: MOFSL Estimates

January 2024 224

 December 2023 Results Preview | Sector: Technology

Technology
Coforge Furloughs: A headwind over and above adverse macros
Cyient
HCL Tech. Higher furloughs likely to dampen revenue growth further
Infosys  The weakness in IT Services demand has been further intensified by higher-than-
LTIMindtree
expected furloughs in 3QFY24. The seasonality is likely to hurt revenue growth
L&T Technology
and margin performances of both tier-1 and tier-2 IT companies. The industry
Mphasis
Persistent Systems
has not witnessed any meaningful change in spending patterns, as discretionary
TCS spending continues to take a pause across enterprises. Although sentiment has
Tech Mahindra improved, it has not yet been reflected in actions. Our IT Services Coverage
Wipro Universe should report a median revenue growth of 0.7% QoQ/2.5% YoY in
Zensar Tech. 3QFY24. The adverse movement of major currencies (EUR/GBP: -1.2%/-2.0%) is
anticipated to further slow down the reported growth. The muted revenue
growth and revised compensation (selective names) in 3Q are less likely to aid
margin improvement. However, the weakening INR (~70bp against USD) should
act as a support. We estimate a flat USD revenue YoY, while INR EBIT/INR PAT
YoY will decline 4.0%/2.0% in 3QFY24.
 The combination of adverse macros and higher-than-expected number of
furloughs has extended the timelines for deal closures and executions across
companies, leading to slower revenue conversion in the third quarter. We
expect the deal TCVs to moderate from the 2Q high base coupled with furloughs
impact in 3Q; otherwise, the earlier theme of reprioritizing cost optimization
and driving efficiency remains intact. We expect the collective deal TCV (Tier1 +
Tier 2) growth to stay in line or moderate YoY.
 The slowdown across major verticals and key geographies should persist, with
BFSI, Retail, Hi-Tech, and Communications likely to experience higher-than-
anticipated furloughs in 3Q. Although the pace of growth deceleration for the
major verticals has slowed in 2QFY24 (BFSI/Retail median declines 0.4%/0.3%
QoQ), the same has not yet gained momentum to support the topline. We
expect BFS and Hi-Tech to be adversely impacted in 3QFY24, while the other
verticals should deliver muted performance. On the other hand, there is no sign
of demand recovery in the key geographies (US and Europe), although the
situation has not deteriorated materially. The majority of the clients are
exercising caution and reprioritizing their spending.
 As 3Q furloughs are higher than anticipated at the beginning of FY24, we expect
the selective Tier-2 companies (Coforge, Cyient) to revise their revenue
guidance downward. Despite this, we expect the companies to maintain and
achieve margins within the guided band by implementing rigorous cost-cutting
measures.
 We expect revenue growth of Tier-I companies to be in the range of -2.7% to
+4.5% QoQ in CC terms. Revenue of Tier-II players are expected to grow to the
tune of -4.4% to +3.0% QoQ in CC terms.

Mukul Garg - Research analyst (Mukul.Garg@MotilalOswal.com)

Pritesh Thakkar - Research analyst (Pritesh.Thakkar@MotilalOswal.com)
 December 2023 Results Preview | Sector: Technology

HCLT/Persistent to lead topline growth among Tier I/Tier II companies

 Revenues of Tier-I companies are expected to be muted due to weak macros,
furloughs, and cuts in discretionary spending. INFO/WPRO should witness a
sharp decline of 1.7%/2.7% QoQ in revenue in CC terms. HCLT should outpace
others with +2.0% QoQ CC for its Service business, while LTIM/TCS/TECHM
should report +1.2%/-0.4%/-1.1% QoQ in CC. Overall, Tier-I companies are
expected to exhibit weak median revenue (-0.7% QoQ in CC).
 Among Tier-II companies, we expect PSYS to outpace its peers with 3.0% QoQ
CC revenue growth, aided by strong momentum in Hi-Tech and Healthcare.
LTTS/COFORGE should experience muted growth of 1.3%/1.0% QoQ in CC,
followed by MPHL/CYL-DET at +1.0%/0.3% QoQ in CC, while ZENT is likely to see
a decline of 4.4% QoQ in CC.

Muted revenue growth and compensation revision to hurt margins

 Margin improvement is expected to be muted due to weak revenue growth
across the board. While a few companies (especially tier-1 firms) have revised
their compensation structures in 3Q, which should have an adverse impact on
margins, a strict focus on cost-cutting measures should partly offset the drag.
 Tier-I companies should report a margin change (+/-) of -100bp to +20bp QoQ in
3QFY24. LTIM should see a further decline of 20bp QoQ despite the wage hike
impact in 2Q, while TCS is expected to see a marginal improvement of 20bp QoQ
due to the absence of operating leverage. For TECHM, despite having a
meaningful hit over the last two consecutive quarters, margins are likely to be
flat owing to weak demand in both CME and Enterprise segments. The Tier-II
pack should see a margin change (+/-) of -280bp to +210bp QoQ, with ZENT’s
margin anticipated to decline from the peak by 280bp QoQ in 3QFY24.
 The net headcount addition would be lower across the board, owing to reduced
working days coupled with subdued demand trend. Additionally, companies
currently possess sufficient talent to sustain their incremental growth trajectory.
The focus has now shifted to optimizing the bench.

PAT growth is likely to be flat due to weak growth

 We expect our Tier-I IT coverage universe to report flat QoQ (+0.2%)
improvement in PAT, with a corresponding decline of 2.6% YoY. TECHM/WPRO
are anticipated to post a decline of 20.3%/6.0% QoQ, while TCS/HCLT are likely
to see an improvement of 2.3% QoQ/5.1% YoY, primarily due to their robust
business mix.
 Tier-II players should register a PAT growth of 5.2% QoQ/9.3% YoY, stronger
than Tier-I firms, aided by growth and margin recovery. COFORGE/CYL/LTTS
should register robust PAT growth of 48.0%/10.0%/9.8% QoQ.

Prefer Tier I over Tier II companies; HCLT remains our top pick
 With improving macro sentiment and an estimated demand recovery for FY25,
the IT stocks have rallied over the last two months. The 1-year forward P/E for
the IT stocks (MOFSL universe) stood at 26x, wherein Tier-2 looks expensive at
35x that translates into ~50% premium to the Tier-1 pack.

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 Given the subdued near-term demand and the lack of any meaningful signs of
recovery in discretionary IT spending, we expect the Tier-2 companies to
reconcile their FY24 growth guidance before seeking any clarity on the CY24E
budget cycle. Among Tier-I players, HCLT is one of the key beneficiaries of
having a defensive business mix that should support growth in a demand-
constraint environment. Additionally, we expect INFO to be a key beneficiary of
the acceleration in digital and business transformations in the medium term.
 Among Tier-II players, our preference lies with CYL, which is poised for a robust
performance. This is supported by the resurgence in the aerospace vertical and
the reduction of challenges in sectors such as railways and communications.

Exhibit 1: Expect Tier-I companies’ revenue (USD) to be weak at -0.4% QoQ

Revenue (USD m) Revenue (INR b)
Company 3QFY24 2QFY24 QoQ (%) 3QFY23 YoY (%) 3QFY24 2QFY24 QoQ (%) 3QFY23 YoY (%)
TCS 7,163 7,210 -0.7% 7,075 1.2% 597 597 0.0% 582 2.5%
INFO 4,624 4,718 -2.0% 4,659 -0.8% 385 390 -1.2% 383 0.5%
HCLT 3,366 3,225 4.4% 3,244 3.8% 280 267 5.1% 267 5.0%
WPRO 2,633 2,713 -2.9% 2,821 -6.7% 221 225 -2.0% 232 -5.0%
TECHM 1,534 1,555 -1.4% 1,668 -8.0% 128 129 -0.7% 137 -7.0%
LTIM 1,086 1,076 1.0% 1,047 3.8% 90 89 1.6% 86 5.0%
Tier I aggregate 20,406 20,497 -0.4% 20,514 -0.5% 1,701 1,696 0.3% 1,688 0.8%
EBIT margin (%) Adjusted PAT (INR b)
Company 3QFY24 2QFY24 QoQ (bps) 3QFY23 YoY (bps) 3QFY24 2QFY24 QoQ (%) 3QFY23 YoY (%)
TCS 24.5 24.3 20 24.5 - 116.5 113.8 2.3% 108.8 7.0%
INFO 20.2 21.2 -100 21.5 -130 61.8 62.2 -0.6% 65.9 -6.2%
HCLT 17.9 18.5 -60 19.6 -170 40.3 38.3 5.1% 41.0 -1.6%
WPRO 13.8 14.8 -100 16.2 -240 25.1 26.7 -6.0% 30.7 -18.2%
TECHM 7.3 7.3 - 12.0 -470 8.0 10.0 -20.3% 12.9 -38.5%
LTIM 15.8 16.0 -20 14.8 100 11.5 11.6 -0.8% 10.8 6.7%
Tier I aggregate 19.3 19.7 -40.0 20.4 -110 263 263 0.2% 270 -2.6%

Exhibit 2: Expect Tier-II firms’ revenue (USD) to be muted at 1.0% QoQ

Revenue (USD m) Revenue (INR b)
Company 3QFY24 2QFY24 QoQ (%) 3QFY23 YoY (%) 3QFY24 2QFY24 QoQ (%) 3QFY23 YoY (%)
LTTS 292 288 1.2% 248 17.6% 24.3 23.9 1.8% 20.5 18.6%
MPHL 402 398 0.8% 429 -6.5% 33.5 33.0 1.5% 35.4 -5.4%
COFORGE 280 278 0.7% 252 11.2% 23.3 22.8 2.5% 20.6 13.4%
PSYS 300 292 2.8% 264 13.5% 25.0 24.1 3.6% 21.7 15.2%
ZENT 143 150 -4.6% 146 -1.8% 11.9 12.4 -3.8% 12.0 -0.3%
CYL 221 214 3.0% 197 12.1% 18.4 17.8 3.4% 16.2 13.7%
Tier II aggregate 1,637 1,621 1.0% 1,536 6.6% 136.4 133.9 1.9% 126.3 8.0%
EBIT margin (%) Adjusted PAT (INR b)
Company 3QFY24 2QFY24 QoQ (bps) 3QFY23 YoY (bps) 3QFY24 2QFY24 QoQ (%) 3QFY23 YoY (%)
LTTS 17.7 17.1 60 18.7 -100 3.5 3.2 9.8% 3.0 14.0%
MPHL 14.3 15.4 -110 15.1 -80 3.8 3.9 -3.2% 4.1 -8.0%
COFORGE 14.0 11.9 210 14.5 -50 2.7 1.8 48.0% 2.3 17.3%
PSYS 13.9 13.7 20 15.4 -150 2.7 2.6 1.8% 2.7 0.1%
ZENT 12.9 15.7 -280 7.1 580 1.2 1.7 -28.8% 0.8 61.7%
CYL 14.6 14.6 - 12.9 170 2.0 1.8 10.0% 1.6 23.8%
Tier II aggregate 14.7 14.7 - 14.6 10 15.9 15.1 5.2% 14.5 9.3%
Source: Company, MOFSL

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Exhibit 3: Revenue growth % (QoQ) decelerated further due to furloughs

USD Revenue Growth Tier I USD Revenue Growth Tier II
9%

6%

3%

0%

-3%

3QFY21

3QFY23
4QFY21

1QFY22

2QFY22

3QFY22

4QFY22

1QFY23

2QFY23

4QFY23

1QFY24

2QFY24

3QFY24E
Source: MOFSL, Company

Exhibit 4: Tier I should perform better on the margin front

EBIT Margins Tier I EBIT Margins Tier II

25%

20%

15%

10%

5%
3QFY21

4QFY21

1QFY22

2QFY22

3QFY22

4QFY22

1QFY23

2QFY23

3QFY23

4QFY23

1QFY24

2QFY24

3QFY24E
Source: MOSL, Company

Exhibit 5: Cross-currency will have no meaningful impact on 3Q USD revenue growth

CC USD growth USD growth Cross-currency impact
QoQ (%) QoQ (%) (bp)
TCS -0.4% -0.7% -30
INFO -1.7% -2.0% -20
HCLT 4.5% 4.4% -10
WPRO -2.7% -2.9% -30
TECHM -1.1% -1.4% -20
LTIM 1.2% 1.0% -20
LTTS 1.3% 1.2% -10
MPHL 1.0% 0.8% -20
COFORGE 1.0% 0.7% -30
PSYS 3.0% 2.8% -20
ZENT -4.4% -4.6% -20
CYL (DET) 0.3% 0.2% -10
Source: Company, MOFSL

Exhibit 6: Currency highlights (INR) in 3QFY24

Rates (INR) Change (QoQ)
USD EUR GBP AUD USD EUR GBP AUD
Average 83.3 89.6 103.3 54.2 0.71% -0.48% -1.32% 0.22%
Closing 83.2 91.9 105.8 56.7 0.21% 4.30% 3.95% 6.54%
Source: Bloomberg, MOFSL

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Exhibit 7: Currency highlights (USD) in 3QFY24

Rates (USD) Change (QoQ)
EUR GBP AUD EUR GBP AUD
Average 1.08 1.24 0.65 -1.18% -2.01% -0.49%
Closing 1.10 1.27 0.68 4.08% 3.73% 5.85%
Source: Bloomberg, MOFSL

Exhibit 8: Relative performance – three-months (%) Exhibit 9: Relative performance – one-year (%)
Nifty Index MOFSL Technology Index Nifty Index MOFSL Technology Index
118 140

111 120

104 100

97 80

90 60
Sep-23 Oct-23 Nov-23 Dec-23 Dec-22 Mar-23 Jun-23 Sep-23 Dec-23
Source: Bloomberg, MOFSL Source: Bloomberg, MOFSL
Exhibit 10: Changes to our estimates
Revised Earlier Change
EPS (INR) EPS (INR) (%)
FY24E FY25E FY26E FY24E FY25E FY26E FY24E FY25E FY26E
TCS 126 144 168 127 145 NA -0.8 -0.9 NA
INFO 59 68 80 61 69 NA -2.5 -1.7 NA
HCLT 57 65 76 58 66 NA -1.5 -1.4 NA
WPRO 20 23 27 20 23 NA 0.2 -1.6 NA
TECHM 42 51 68 44 55 NA -5.2 -6.6 NA
LTIM 160 195 242 165 206 NA -3.1 -5.0 NA
LTTS 124 151 206 123 149 NA 0.6 1.6 NA
MPHL 83 98 117 88 109 NA -6.3 -10.6 NA
COFORGE 147 186 217 146 186 NA 0.5 -0.4 NA
PSYS 144 178 216 149 187 NA -3.4 -4.7 NA
ZENT 26 24 28 26 26 NA -1.2 -6.8 NA
CYL (DET) 66 80 92 66 81 NA -0.5 -1.0 NA
Source: Company, MOFSL

Exhibit 11: Expected quarterly performance summary

CMP Sales (INR b) EBIT (INR b) Adjusted net profit (INR b)
Companies Variance Variance Variance Variance Variance Variance
(INR) Rating Dec’23E Dec’23E Dec’23E
YoY (%) QoQ (%) YoY (%) QoQ (%) YoY (%) QoQ (%)
TCS 3,811 Buy 596.7 2.5 0.0 146.2 2.3 0.9 116.5 7.0 2.3
INFO 1,551 Buy 385.2 0.5 -1.2 77.9 -5.5 -5.9 61.8 -6.2 -0.6
HCLT 1,483 Buy 280.4 5.0 5.1 50.2 -3.9 1.8 40.3 -1.6 5.1
WPRO 477 Neutral 220.7 -5.0 -2.0 30.5 -19.0 -8.5 25.1 -18.2 -6.0
TECHM 1,298 Neutral 127.8 -7.0 -0.7 9.3 -43.3 -0.9 8.0 -38.5 -20.3
LTIM 6,264 Neutral 90.5 5.0 1.6 14.3 12.0 0.4 11.5 6.7 -0.8
LTTS 5,207 Buy 24.3 18.6 1.8 4.3 12.3 5.5 3.5 14.0 9.8
MPHL 2,732 Neutral 33.5 -5.4 1.5 4.8 -10.6 -5.6 3.8 -8.0 -3.2
COFORGE 6,190 Neutral 23.3 13.4 2.5 3.3 9.2 20.9 2.7 17.3 48.0
PSYS 7.322 Neutral 25.0 15.2 3.6 3.5 4.2 5.0 2.7 0.1 1.8
ZENT 608 Neutral 11.9 -0.3 -3.8 1.5 80.8 -20.7 1.2 61.7 -28.8
CYL 2,305 Buy 18.4 13.7 3.4 2.7 28.7 3.3 2.0 23.8 10.0
Sector aggregate (INR b) 1,838 1.3 0.4 348 -4.0 -1.5 279 -2.0 0.5
Source: Company, MOFSL

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Exhibit 12: Comparative valuations

Target Upside/ EPS Dividend
CMP M-cap EPS (INR) P/E (x)
Company Price Downside CAGR (%) yield (%)
(INR) (INR b)
FY24E FY25E FY26E FY24E-26E FY23 FY24E FY25E FY26E
TCS 3,811 13,943 4,310 13% 126.0 143.7 167.6 15.4 3.0 30.3 26.5 22.7
INFO 1,551 6,438 1,700 10% 59.4 68.0 79.6 15.8 2.2 26.1 22.8 19.5
HCLT 1,483 4,025 1,700 15% 57.2 65.0 76.2 15.4 3.2 25.9 22.8 19.5
WPRO 477 2,494 500 5% 19.6 22.8 27.3 18.1 0.2 24.3 20.9 17.5
TECHM 1,298 1,267 1,180 -9% 41.8 51.1 67.8 27.4 3.9 31.1 25.4 19.1
LTIM 6,264 1,854 6,450 3% 160.1 195.5 242.0 22.9 1.0 39.1 32.0 25.9
MPHL 2,732 516 2,930 7% 82.6 97.6 117.2 19.1 1.9 33.1 28.0 23.3
LTTS 5,207 550 6,050 16% 123.9 151.2 206.4 29.1 0.9 42.0 34.4 25.2
PSYS 7,322 563 6,780 -7% 143.6 178.3 215.8 22.6 0.7 51.0 41.1 33.9
COFORGE 6,190 382 5,760 -7% 147.2 185.7 217.4 21.5 1.0 42.1 33.3 28.5
CYL 2,305 255 2,640 15% 69.3 87.4 102.9 21.9 1.1 33.3 26.4 22.4
ZENT 608 137 550 -10% 25.5 23.9 27.8 4.3 0.8 23.8 25.5 21.9
Source: Company, MOFSL

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The tables below provide a snapshot of actual and estimated numbers for IT companies under the MOFSL coverage universe.
Highlighted columns indicate the quarter/financial year under review.

Coforge Neutral
CMP INR6190| TP: INR5760 (-7%) EPS CHANGE (%): FY24|25: +0.5|-0.4
 Revenue growth is projected to be muted at 0.7% QoQ due  Deal wins to be attractive backed by healthy deal
to higher-than-expected number of furloughs. BFS is pipeline on both BFS and Insurance verticals
expected to have some furloughs impact, while Insurance
would continue its growth momentum.
 EBITDA margin (Pre-RSU) is expected to improve 110bp  We expect the company to revise its revenue guidance
QoQ, led by operating efficiency and offshoring. to a lower band of +13-16% YoY in CC
Quarterly performance (Ind-AS)
Y/E March FY23 FY24E FY23 FY24E
(Consolidated) 1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
Rev. (USD m) 239 247 252 264 272 278 280 290 1,002 1,120
QoQ (%) 2.7 3.4 1.9 5.0 2.8 2.3 0.7 3.7 15.6 11.8
Revenue (INR m) 18,294 19,594 20,558 21,700 22,210 22,762 23,321 24,108 80,146 92,400
YoY (%) 25.2 24.9 24.0 24.5 21.4 16.2 13.4 11.1 24.6 15.3
GPM (%) 30.4 32.0 33.4 34.1 30.7 32.5 33.0 33.7 32.5 32.5
SGA (%) 13.9 13.7 14.9 14.5 14.7 14.9 14.5 14.6 14.3 14.7
EBITDA (INR m) 2,922 3,449 3,615 4,076 3,316 3,473 4,035 4,315 14,062 15,139
EBITDA margin (%) 16.0 17.6 17.6 18.8 14.9 15.3 17.3 17.9 17.5 16.4
EBIT (INR m) 2,292 2,835 2,991 3,359 2,559 2,701 3,265 3,520 11,477 12,045
EBIT margin (%) 12.5 14.5 14.5 15.5 11.5 11.9 14.0 14.6 14.3 13.0
Other income -76 -150 83 -487 -152 -295 233 241 -630 27
ETR (%) 22.2 17.7 23.3 18.3 20.1 21.9 21.5 21.5 20.4 21.3
Minority Interest -222.0 -195.0 -77.0 -19.0 -104.0 -69.0 -69.5 -69.3 -513.0 -311.8
Adj. PAT 1,501 2,016 2,282 2,327 1,818 1,809 2,677 2,883 8,126 9,187
QoQ (%) -29.3 34.3 13.2 2.0 -21.9 -0.5 48.0 7.7
YoY (%) 10.3 32.7 21.1 9.6 21.2 -10.3 17.3 23.9 18.0 13.1
Adj. EPS (INR) 24.2 32.5 36.7 37.4 29.2 29.0 42.9 46.2 130.6 147.2

Cyient Buy
CMP INR2305 | TP: INR2640 (+15%) EPS CHANGE (%): FY24|25: -0.5|-1.0
 Expect 0.3% QoQ CC growth for DET in 3QFY24. The  DET’s margin is likely to maintain a steady state, given the
softness will be on account of muted Auto segment; muted growth in 3Q. Current margin run-rate is already
otherwise Aerospace is performing well, while Comm has within the guided band of +150-250bp YoY.
achieved a steady state.
 Sustainability is performing well and should maintain the  Given the softness in 3QFY24, we expect the DET revenue
earlier momentum in 3Q growth guidance to be revised downward.
Quarterly performance (Consol)
Y/E March FY23 FY24E FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
Revenue (USD m) 162 175 197 213 205 214 221 235 746 875
QoQ (%) 3.1 8.2 12.7 8.1 -3.6 4.4 3.0 6.4 22.7 17.3
Revenue (INR m) 12,501 13,962 16,182 17,514 16,865 17,785 18,393 19,505 60,159 72,547
YoY (%) 18.1 25.6 36.7 48.3 34.9 27.4 13.7 11.4 32.7 20.6
GPM (%) 36.8 38.4 37.8 38.0 36.6 35.7 36.8 37.3 37.8 36.6
SGA (%) 21.2 22.0 20.6 19.6 17.9 17.4 18.2 18.4 20.8 18.0
EBITDA 1,946 2,290 2,785 3,222 3,156 3,258 3,421 3,686 10,243 13,521
EBITDA margin (%) 15.6 16.4 17.2 18.4 18.7 18.3 18.6 18.9 17.0 18.6
EBIT 1,435 1,660 2,086 2,496 2,480 2,600 2,685 2,906 7,677 10,671
EBIT margin (%) 11.5 11.9 12.9 14.3 14.7 14.6 14.6 14.9 12.8 14.7
Other income 160 -148 60 -257 -176 -134 37 39 -185 -234
ETR (%) 27.2 19.4 24.1 21.3 22.9 23.6 24.0 24.0 23.0 23.7
Adj. PAT 1,161 1,218 1,628 1,762 1,767 1,831 2,015 2,185 5,769 7,797
QoQ (%) -24.7 4.9 33.7 8.2 0.3 3.6 10.0 8.4
YoY (%) 0.9 0.5 23.7 14.3 52.2 50.3 23.8 24.0 10.5 35.2
EPS (INR) 10.6 11.1 14.8 16.0 16.0 16.6 18.2 19.8 52.4 70.5

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HCL Technologies Buy

CMP INR1483| TP: INR1700 (+16%) EPS CHANGE (%): FY24|25: -1.5| -1.4
 Service (IT +ER&D) revenue growth (organic) is expected
 The wage compensation will have a 60bp QoQ impact on
to be muted on account of higher furloughs than last year.
its Service business margin. The growth from the high-
The ramp up of the Verizon deal and ASAP integration
margin P&P business, however, should partly offset the
should aid its topline growth. We expect Service business
wage hike impact
to report 2.0% QoQ growth in CC.
 We expect the company to maintain its revenue guidance
 P&P is anticipated to rebound (+29.0% QoQ) due to 3Q
and margins. Commentary on the ramp up of mega wins
seasonality and should contribute meaningfully to the
and the demand trends around ERD space would be the
sequential consolidated growth
key monitorables
Quarterly performance
Y/E March FY23 FY24E FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
Revenue (USD m) 3,025 3,082 3,244 3,235 3,200 3,225 3,366 3,378 12,586 13,169
QoQ (%) 1.1 1.9 5.3 -0.3 -1.1 0.8 4.4 0.4 9.6 4.6
Revenue (INR b) 235 247 267 266 263 267 280 280 1,015 1,090
YoY (%) 16.9 19.5 19.6 17.7 12.1 8.0 5.0 5.4 18.5 7.5
GPM (%) 35.8 35.8 37.4 36.5 35.6 36.2 35.6 36.2 36.4 35.9
SGA (%) 12.9 12.2 12.0 12.8 13.6 12.4 12.6 12.8 12.5 12.8
EBITDA 50 54 63 59 54 59 60 62 226 235
EBITDA margin (%) 21.1 22.0 23.7 22.3 20.6 22.1 21.5 21.9 22.3 21.6
EBIT 40 44 52 48 45 49 50 51 185 195
EBIT margin (%) 17.0 17.9 19.6 18.2 17.0 18.5 17.9 18.3 18.2 17.9
Other income 3 2 1 4 2 2 3 3 10 10
ETR (%) 24.3 23.9 23.8 23.4 24.8 25.3 24.0 24.0 23.8 24.5
Adjusted PAT 33 35 41 40 35 38 40 41 148 155
QoQ (%) -8.7 6.3 17.4 -2.8 -11.2 8.4 5.2 2.1
YoY (%) 2.1 6.9 19.0 10.8 7.6 9.8 -1.6 3.3 9.9 4.5
EPS 12.1 12.9 15.1 14.7 13.0 14.1 14.9 15.2 54.8 57.2

Infosys Buy
CMP INR1551| TP: INR1700 (+10%) EPS CHANGE (%): FY24|25: -2.5|-1.7
 Revenue growth is expected to be weak at -1.7% QoQ CC,  Deal pipeline remains healthy while closure remains a bit
on account of continued macro challenges and additional challenging due to slower decision making and furloughs.
3Q seasonality. However, the conversion remains on track.
 Operating margin is also likely to see an adverse impact,  We expect the company to maintain its guidance on the
led by wage revision and weak growth. We expect the back of healthy deal wins and strong pipeline, which are
operating margin at 20.2%, down -100bp QoQ expected to support 4QFY24 growth.
Quarterly performance (IFRS)
Y/E March FY23 FY24E FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
Revenue (USD m) 4,444 4,555 4,659 4,554 4,617 4,718 4,624 4,723 18,212 18,681
QoQ (%) 3.8 2.5 2.3 -2.3 1.4 2.2 -2.0 2.1 66.5 2.6
Revenue (INR m) 345 365 383 374 379 390 385 392 1,468 1,546
YoY (%) 23.6 23.4 20.2 16.0 10.0 6.7 0.5 4.7 108.1 5.4
GPM (%) 29.3 30.5 30.7 30.5 30.5 30.7 29.6 30.1 30.3 30.2
SGA (%) 9.2 8.9 9.2 9.5 9.6 9.5 9.4 9.4 9.2 9.5
EBITDA 87 97 102 98 96 101 96 99 384 392
EBITDA margin (%) 25.2 26.7 26.6 26.1 25.4 25.8 24.8 25.3 26.2 25.3
EBIT 69 79 82 79 79 83 78 81 309 321
EBIT margin (%) 20.1 21.5 21.5 21.0 20.8 21.2 20.2 20.7 21.1 20.7
Other income 6 5 7 6 5 5 6 6 24 22
ETR (%) 28.8 28.2 26.3 27.5 28.9 29.1 26.5 26.5 27.7 27.8
PAT 54 60 66 61 59 62 62 64 241 247
QoQ (%) -5.7 12.3 9.4 -7.0 -3.0 4.5 -0.8 4.1
YoY (%) 3.2 11.1 13.4 7.8 10.9 3.2 -6.4 4.7 63.8 2.7
EPS (INR) 12.8 14.3 15.7 14.8 14.4 15.0 14.9 15.5 57.3 59.4

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LTIMindtree Neutral
CMP INR6264| TP: INR 6450 (+3%) EPS CHANGE (%): FY24|25: -3.1|-5.0
 LTIM should report 1.2% CC growth in 3Q due to higher  Manufacturing and Resources are performing well and
furloughs in Hi-Tech and BFSI. The adverse impact was expected to contribute majorly to the topline growth.
broad-based and has been witnessed across its client
base.
 Margins are likely to see a sequential decline of 20bp QoQ  We expect the margin guidance to be maintained.
due to lower operating leverage. Demand commentary on 4Q to be closely monitored.
Quarterly performance
Y/E March FY23 FY24E FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
Revenue (USD m) 980 1,022 1,047 1,058 1,059 1,076 1,086 1,131 4,106 4,351
QoQ (%) 3.7 4.3 2.4 1.0 0.1 1.6 1.0 4.2 17.2 6.0
Revenue (INR m) 76,442 82,278 86,200 86,910 87,021 89,054 90,467 93,892 3,31,830 3,60,434
YoY (%) 32.9 29.6 25.3 21.9 13.8 8.2 5.0 8.0 27.1 8.6
GPM (%) 31.1 30.8 28.6 29.9 31.6 31.4 31.2 31.9 30.1 31.5
SGA (%) 11.6 11.0 11.7 11.4 12.8 13.1 13.3 13.1 11.4 13.1
EBITDA 14,937 16,356 14,548 16,037 16,355 16,313 16,194 17,609 61,878 66,470
EBITDA margin (%) 19.5 19.9 16.9 18.5 18.8 18.3 17.9 18.8 18.6 18.4
EBIT 13,273 14,397 12,767 14,214 14,508 14,231 14,294 15,731 54,651 58,764
EBIT margin (%) 17.4 17.5 14.8 16.4 16.7 16.0 15.8 16.8 16.5 16.3
Other income 1,465 1,233 1,139 228 856 962 1,086 1,221 4,065 4,124
ETR (%) 24.9 23.9 22.3 22.9 25.0 23.5 25.0 25.0 23.5 24.6
Adj. PAT 11,066 11,890 10,807 11,141 11,523 11,623 11,535 12,714 44,904 47,394
QoQ (%) -0.2 7.4 -9.1 3.1 3.4 0.9 -0.8 10.2
YoY (%) 31.7 25.1 2.9 0.5 4.1 -2.2 6.7 14.1 13.7 5.5
EPS (INR) 36.1 40.1 35.4 37.6 38.9 39.2 39.0 43.0 151.8 160.1

LTTS Buy
CMP INR5207| TP: INR6050 (+16%) EPS CHANGE (%): FY24|25: +0.6|+1.6
 We expect revenue growth of 1.3% QoQ CC in 3Q. The  We anticipate the deal momentum to continue in 3Q on
growth is expected to be muted on account of seasonality, selected verticals
and UAW strike, which led the delay in project ramp ups
 With wage hike behind, we expect 60bp sequential  We expect the company to maintain its FY24 revenue
improvement in margin guidance, while closely monitoring any development
around UAW strike and demand for ERD in general.
Quarterly performance
Y/E March FY23 FY24E FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
Revenue (USD m) 240 247 248 255 280 288 292 302 990 1,162
QoQ (%) 3.2 3.2 0.4 2.9 9.8 2.9 1.2 3.6 12.4 17.4
Revenue (INR m) 18,737 19,951 20,486 20,962 23,014 23,865 24,295 25,067 80,136 96,241
YoY (%) 23.4 24.1 21.4 19.4 22.8 19.6 18.6 19.6 22.0 20.1
GPM (%) 33.0 32.1 33.0 32.5 30.0 28.0 29.0 28.5 32.6 28.9
SGA (%) 11.6 11.0 11.5 11.0 10.4 8.1 8.8 9.3 11.3 9.1
EBITDA 4,010 4,218 4,412 4,492 4,528 4,756 4,908 4,824 17,132 19,016
EBITDA margin (%) 21.4 21.1 21.5 21.4 19.7 19.9 20.2 19.2 21.4 19.8
EBIT 3,434 3,628 3,829 3,927 3,954 4,075 4,300 4,197 14,818 16,527
EBIT margin (%) 18.3 18.2 18.7 18.7 17.2 17.1 17.7 16.7 18.5 17.2
Other income 340 261 627 392 357 286 413 426 1,620 1,482
ETR (%) 27.1 27.2 31.6 28.0 27.6 27.6 26.5 26.5 28.6 27.0
PAT 2,742 2,824 3,036 3,096 3,111 3,154 3,462 3,396 11,698 13,123
QoQ (%) 4.7 3.0 7.5 2.0 0.5 1.4 9.8 -1.9
YoY (%) 26.8 22.8 22.0 18.2 13.5 11.7 14.0 9.7 22.2 12.2
EPS (INR) 26.0 26.7 28.7 29.2 29.4 29.8 32.7 32.0 110.5 123.9

January 2024 233

 December 2023 Results Preview | Sector: Technology

Mphasis Neutral
CMP INR2732 | TP: INR2930 (+7%) EPS CHANGE (%): FY24|25: -6.3|-10.6
 We expect a decline of 2.8% CC in revenue (organic) QoQ  We expect margin to see a decline of 110bp QoQ due to
on account of higher-than-expected furloughs in BFS. an increase in amortization (~100bp), otherwise the
Including inorganic (integration of Silverline), the growth is organic margin is expected to improve sequentially.
estimated at 1.0% QoQ in CC terms.
 The weakness in the mortgage business (DR) continued in  The volume recovery for its DR business, and outlook for
3Q, which is likely to lead the decline in volume for BFS. the mortgage business and deal TCVs need to be
monitored.
Quarterly performance
Y/E March FY23 FY24E FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
Revenue (USD m) 436 440 429 412 398 398 402 414 1,718 1,612
QoQ (%) 1.2 1.0 -2.5 -4.1 -3.4 0.1 0.8 3.2 7.8 -6.1
Revenue (INR m) 34,113 35,198 35,062 33,612 32,520 32,765 33,254 34,193 1,37,985 1,32,732
YoY (%) 26.8 22.7 12.2 2.5 -4.7 -6.9 -5.2 1.7 15.4 -3.8
GPM (%) 29.8 28.1 28.5 29.2 29.1 28.9 28.2 28.1 28.9 28.6
SGA (%) 12.2 10.5 10.8 11.4 11.1 10.7 11.1 10.5 11.2 10.8
EBITDA 6,001 6,177 6,175 5,987 5,869 5,956 5,686 6,018 24,340 23,529
EBITDA margin (%) 17.6 17.5 17.6 17.8 18.0 18.2 17.1 17.6 17.6 17.7
EBIT 5,205 5,376 5,354 5,152 4,995 5,067 4,784 5,090 21,087 19,936
EBIT margin (%) 15.3 15.3 15.3 15.3 15.4 15.5 14.4 14.9 15.3 15.0
Other income 125 174 156 189 263 150 266 274 644 953
ETR (%) 24.6 24.6 25.2 24.1 24.7 24.9 24.9 24.9 24.6 24.8
PAT 4,020 4,184 4,123 4,053 3,961 3,920 3,795 4,030 16,380 15,706
QoQ (%) 2.5 4.1 -1.5 -1.7 -2.3 -1.0 -3.2 6.2
YoY (%) 18.3 17.1 15.3 3.4 -1.5 -6.3 -8.0 -0.6 13.2 -4.1
EPS (INR) 21.2 22.1 21.8 21.5 20.9 20.6 20.0 21.2 86.9 82.6

Persistent Systems Neutral

CMP INR7322 | TP: INR6780 (-7%) EPS CHANGE (%): FY24|25: -3.4|-4.7
 Expect revenue growth of 3.0% QoQ in CC, aided by  Deal wins should be healthy in 3Q with larger renewal
continued momentum in Hi-Tech and Healthcare, while component to the overall TCV. The deal TCV is expected to
BFSI is expected to be soft due to furloughs. improve in 3QFY24.
 Margins are expected to improve by 20bp QoQ; however,  Commentaries on the demand environment and deal
it would be lower than the corresponding last year. The pipeline should be closely monitored.
cost misalignment with revenue for an onsite project
might lead to a lower margin recovery in 3Q.
Quarterly performance
(IFRS)
Y/E March FY23 FY24E FY23 FY24E
(Consolidated) 1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
Revenue (USD m) 241.5 255.6 264.4 274.6 282.9 291.7 300.0 311.0 1,036 1,186
QoQ (%) 11.1 5.8 3.4 3.9 3.0 3.1 2.8 3.7 35.3 14.4
Revenue (INR m) 18,781 20,486 21,694 22,545 23,212 24,117 24,987 25,814 83,506 98,130
QoQ (%) 14.7 9.1 5.9 3.9 3.0 3.9 3.6 3.3
YoY (%) 52.7 51.6 45.4 37.6 23.6 17.7 15.2 14.5 46.2 17.5
GPM (%) 33.8 33.5 33.8 33.9 34.2 33.1 33.0 33.5 33.8 33.4
SGA (%) 16.1 15.5 15.3 15.5 16.0 16.3 16.0 15.5 15.6 15.9
EBITDA 3,333 3,680 4,016 4,163 4,229 4,052 4,248 4,647 15,191 17,175
EBITDA margin (%) 17.7 18.0 18.5 18.5 18.2 16.8 17.0 18.0 18.2 17.5
EBIT 2,688 2,987 3,332 3,466 3,466 3,308 3,473 3,846 12,472 14,093
EBIT margin (%) 14.3 14.6 15.4 15.4 14.9 13.7 13.9 14.9 14.9 14.4
Other income 131 -31 192 -60 90 250 100 103 233 544
ETR (%) 24.9 25.6 24.1 26.2 22.0 26.0 25.0 25.0 25.2 24.5
PAT 2,116 2,200 2,676 2,515 2,774 2,633 2,680 2,962 9,507 11,049
QoQ (%) 5.3 4.0 21.6 -6.0 10.3 -5.1 1.8 10.5
YoY (%) 33.3 36.0 51.7 25.1 31.1 19.7 0.1 17.8 36.2 16.2
EPS (INR) 27.7 28.8 31.1 32.9 29.8 34.2 34.8 38.5 120.5 137.3

January 2024 234

 December 2023 Results Preview | Sector: Technology

TCS Buy
CMP INR3811 | TP: INR4310 (+13%) EPS CHANGE (%): FY24|25: -0.8|-0.9
 The growth is expected to stay muted due to furloughs  EBIT % is expected to see a marginal improvement of
and weak macros. Expect 0.4% QoQ CC growth for 3Q. 20bp QoQ due to absence of operating leverage.
 The deal pipeline should remain resilient, especially in the  Outlook on near-term demand environment, BFSI, and
UK regions, while the US and Europe continue to stay on a deal wins are the key monitorables.
weaker trajectory.
Quarterly performance (IFRS)
Y/E March FY23 FY24E FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
IT Services Revenue (USD m) 6,780 6,877 7,075 7,195 7,226 7,210 7,163 7,397 27,927 28,995
QoQ (%) 1.3 1.4 2.9 1.7 0.4 -0.2 -0.7 3.3 8.6 3.8
Overall Revenue (INR b) 528 553 582 592 594 597 597 614 2,255 2,401
QoQ (%) 4.3 4.8 5.3 1.6 0.4 0.5 0.0 2.9
YoY (%) 16.2 18.0 19.1 16.9 12.6 7.9 2.5 3.8 17.6 6.5
GPM (%) 38.4 39.5 40.1 40.1 39.5 40.1 40.2 40.7 39.6 40.1
SGA (%) 15.3 15.5 15.5 15.7 16.4 15.8 15.7 15.9 15.5 15.9
EBITDA 134 145 156 157 150 157 158 165 592 630
EBITDA margin (%) 25.3 26.2 26.8 26.5 25.2 26.3 26.6 26.8 26.2 26.2
EBIT 122 133 143 145 138 145 146 152 542 581
EBIT margin (%) 23.1 24.0 24.5 24.5 23.2 24.3 24.5 24.8 24.1 24.2
Other income 6 8 4 9 12 8 10 10 27 41
PBT 128 141 146 154 150 153 156 162 569 622
ETR (%) 25.5 25.8 25.7 25.7 25.8 25.8 25.5 25.5 25.7 25.6
Adj. PAT 95 105 109 114 111 114 116 121 423 462
Exceptional items 0 0 0 0 0 0 0 0 0 0
Reported PAT 95 105 109 114 111 114 116 121 423 462
QoQ (%) -4.4 9.9 4.0 5.1 -2.8 2.3 2.3 3.9
YoY (%) 5.4 8.4 11.0 14.8 16.8 8.7 7.0 5.9 10.0 9.3
EPS (INR) 26.0 28.5 29.6 31.1 30.3 31.0 31.7 33.0 115.3 126.0

Tech Mahindra Neutral

CMP INR1298 | TP: INR1180 (-9%) EPS CHANGE (%): FY24|25: -5.2|-6.6
 Revenue is expected to decline further following the dip in  Deal wins are likely to be muted due to lower working
2Q as CME and Enterprise both remain under pressure days. We expect deal TCV at USD300-500m in 3QFY24.
due to seasonality. Expect 1.1% QoQ CC decline in
revenue for 3QFY24.
 Margins are likely to be stable and we do not see any  The outlook on margin and growth in the CME vertical will
meaningful improvement from 2QFY24 level. The absence be the key monitorables.
of growth and continued investments are likely to keep
margin under pressure
Quarterly performance
Y/E March FY23 FY24E FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
Revenue (USD m) 1,633 1,638 1,668 1,668 1,601 1,555 1,534 1,569 6,607 6,259
QoQ (%) 1.5 0.3 1.8 0.0 -4.0 -2.8 -1.4 2.3 10.1 -5.3
Revenue (INR b) 127 131 137 137 132 129 128 130 533 518
YoY (%) 24.6 20.7 19.9 13.2 3.5 -2.0 -7.0 -5.0 19.4 -2.7
GPM (%) 28.3 27.9 28.7 28.9 25.7 22.5 24.7 25.7 28.5 24.6
SGA (%) 13.5 12.8 13.1 14.2 13.5 11.5 14.0 13.0 13.4 13.0
EBITDA 19 20 21 20 16 14 14 16 80 60
EBITDA margin (%) 14.8 15.1 15.6 14.7 12.2 10.9 10.7 12.7 15.1 11.6
EBIT 14 15 16 15 12 9 9 12 61 42
EBIT margin (%) 11.0 11.4 12.0 11.2 8.8 7.3 7.3 9.2 11.4 8.1
Other income 1 2 1 2 1 2 1 1 6 5
ETR (%) 22.8 21.4 27.3 22.9 21.8 9.9 25.0 25.0 23.7 20.6
Adj. PAT 11 13 13 13 10 10 8 10 51 37
QoQ (%) -24.9 15.8 -1.0 2.6 -28.2 2.3 -19.5 25.0
YoY (%) -16.4 -2.2 -5.3 -11.6 -15.5 -25.3 -39.3 -26.1 -8.9 -26.9
Extra-Ordinary Item 0.0 -0.2 0.0 -2.1 -2.6 -4.8 -5.0 0.0 -2.4 -12.5
Reported PAT 11.3 12.9 13.0 11.2 6.9 4.9 2.9 9.8 48.3 25
EPS (INR) 12.8 14.8 14.7 15.0 10.8 11.0 8.9 11.1 57.3 41.8

January 2024 235

 December 2023 Results Preview | Sector: Technology

Wipro Neutral
CMP INR477 | TP: INR500 (+5%) EPS CHANGE (%): FY24|25: +0.2|-1.6
 We expect WPRO to report a revenue decline of 2.7% QoQ  IT Services margin should see a contraction of 100bp on
in CC, due to furloughs and macro impact, leading to account of compensation revision and weak growth.
continued softness in verticals
 Consulting business is continued to be weak owing to a  Commentary on revenue conversion, consulting, and deal
cut in discretionary spending and reprioritizing projects. pipeline will be the key monitorables.
Quarterly performance (IFRS)
Y/E March FY23 FY24E FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
IT Services Revenue (USD m) 2,756 2,817 2,821 2,840 2,779 2,713 2,633 2,671 11,234 10,796
QoQ (%) 1.3 2.2 0.1 0.6 -2.1 -2.3 -2.9 1.4 8.5 -3.9
Overall Revenue (INR b) 215 225 232 232 228 225 221 223 905 896
QoQ (%) 3.2 4.7 3.1 -0.2 -1.5 -1.4 -2.0 1.2
YoY (%) 17.9 14.6 14.4 11.2 6.0 -0.1 -5.0 -3.7 14.4 -1.0
GPM (%) 27.7 27.3 29.7 29.8 29.4 29.3 27.5 28.2 28.7 28.6
SGA (%) 13.4 13.4 14.1 14.0 14.2 14.6 13.8 13.8 13.7 14.1
EBITDA 40 41 46 46 43 42 39 41 173 164
EBITDA margin (%) 18.5 18.1 19.9 19.9 18.8 18.5 17.5 18.2 19.1 18.3
IT Services EBIT (%) 14.9 15.1 16.3 16.3 16.0 16.1 15.1 15.8 15.7 15.7
EBIT margin (%) 14.8 14.4 16.2 16.2 15.1 14.8 13.8 14.5 15.4 14.6
Other income 2 2 2 3 3 2 2 2 8 10
ETR (%) 23.6 22.5 22.9 23.0 24.0 24.0 24.0 24.0 23.0 24.0
PAT 26 27 31 31 29 26 25 26 114 106
QoQ (%) -17.0 3.7 14.8 0.7 -6.6 -7.8 -5.8 5.7
YoY (%) -20.7 -9.3 2.9 -0.4 12.0 -0.5 -18.4 -14.3 -7.1 -6.5
EPS (INR) 4.7 4.9 5.6 5.6 5.1 5.0 4.7 5.0 20.7 19.6

Zensar Technologies Neutral

CMP INR608| TP: INR550 (-10%) EPS CHANGE (%): FY24|25: -1.2|-6.8
 Hi-Tech is likely to be under pressure in 3Q while other  The order book should look better YoY; however,
segments would remain soft due to higher furloughs. We sequentially its should see some moderation due to
expect revenue to decline 4.4% QoQ CC in 3QFY24. furloughs and slower decision making
 We expect margins to moderate from its 2Q peak. EBIT  The demand environment within its critical sectors and
margin is expected to be at 12.9%, down 280bp QoQ. progress on stimulating growth levers would be the key
monitorables.
Quarterly performance
Y/E March FY23 FY24E FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
Revenue (USD m) 156 155 146 148 149 150 143 147 604 590
QoQ (%) 1.8 -0.6 -5.9 1.1 1.2 0.6 -4.6 2.7 6.1 -2.4
Revenue (INR m) 12,034 12,346 11,976 12,127 12,272 12,408 11,938 12,215 48,483 48,834
YoY (%) 28.5 17.5 8.6 5.1 2.0 0.5 -0.3 0.7 14.2 0.7
GPM (%) 26.6 25.3 27.4 31.9 33.6 31.8 32.8 33.2 27.8 32.8
SGA (%) 15.3 16.8 16.1 17.4 14.9 13.2 16.7 16.8 16.4 15.4
EBITDA 1,361 1,054 1,349 1,759 2,301 2,308 1,922 1,999 5,523 8,530
EBITDA margin (%) 11.3 8.5 11.3 14.5 18.8 18.6 16.1 16.4 11.4 17.5
EBIT 871 562 852 1,408 1,878 1,942 1,540 1,608 3,693 6,969
EBIT margin (%) 7.2 4.6 7.1 11.6 15.3 15.7 12.9 13.2 7.6 14.3
Other income 149 209 183 209 224 306 131 134 750 796
ETR (%) 26.4 26.3 26.1 26.2 25.7 22.7 26.0 26.0 26.2 25.0
Adj. PAT 751 568 765 1,193 1,562 1,738 1,237 1,290 3,277 5,827
QoQ (%) -42.1 -24.4 34.7 55.9 30.9 11.3 -28.8 4.3
YoY (%) -25.6 -39.8 -15.8 -8.0 108.0 206.0 61.7 8.1 -21.2 77.8
EPS (INR) 3.3 2.5 3.4 5.2 6.8 7.6 5.4 5.6 14.4 25.5

January 2024 236

 December 2023 Results Preview | Sector: Telecom

Telecom
Company Moderate growth with elevated capex
Bharti Airtel
Indus Towers Moderate growth could continue
RJio We expect the overall telecom sector to see a moderate revenue growth of 2.5%
Tata Communications QoQ, driven by both an increase in subscribers and mix led ARPU improvements.
Vodafone Idea However, a) the absence of tariff hike and b) slow market share shift from VIL may
lead to moderation in revenue growth over the next few quarters, unlike the 4-5%
QoQ growth witnessed in the last few years.

Bharti looking to drive ARPUs; RJio chasing subscriber growth

The industry growth should be led by 1.5% ARPU mix growth and 1% industry
subscriber growth. The recent 5G ramp-up has not contributed meaningfully to
revenue growth. Within the industry, Bharti/RJio continue to see higher revenue
growth of 2.5%/3.0%, respectively.

Bharti’s revenue growth will be largely led by 1%/1.5% increase in

subscribers/ARPU. This strategy involves upgrading 2G subscribers to 4G, shifting
the subscriber base toward Postpaid, and encouraging high data usage, thereby
emphasizing ARPU enhancement through a diversified mix. RJio’s revenue growth
should be led by 2%/0.7% growth in subscriber base and ARPU as it continues to
lead the incremental subscriber market share, gaining share from VIL.

Blended ARPU growth supporting margin improvement

The EBITDA margin may slightly improve with limited operating leverage, due to the
slower revenue growth led by a) an increase in blended ARPU and b) controlled
opex, especially network opex. Subsequently, we expect 3% QoQ EBITDA growth for
both RJio and Bharti (India Mobile), respectively, with margin expansions of 10-40bp
to 52.5% and 55.3%, respectively. We expect VIL to post 1% QoQ EBITDA growth, led
by an increase in ARPU, even after losing its market share with margin expansions of
20bp QoQ to 40.2%.

Capex expected to remain elevated

We expect the capex to remain elevated, given a) 5G capex and b) rural
densification. RJio should have completed the 5G telecom services rollout in
majority of the cities/towns by Dec’23, using standalone architecture, while Bharti is
planning to cover the urban cities by Mar’24, using non-standalone architecture. We
expect a continued increase in the quarterly capex runrate due to the aggressive
rollout. Last quarter’s capex was affected by seasonal factors, contributing to the
expected rise. VIL’s 5G plans depend on its fundraise. It also plans to use the non-
standalone architecture for its 5G rollout. Bharti’s management expects INR750b
capex in the next three years with front-loading in the initial period. RJio plans to
invest INR2t to develop its network (including INR881b for the spectrum).

Aliasgar Shakir - Research Analyst (Aliasgar.Shakir@MotilalOswal.com)

Research Analyst: Tanmay Gupta (tanmay.gupta@motilaloswal.com)| Harsh Gokalgandhi (Harsh.Gokalgandhi@MotilalOswal.com)
January 2021 237
 December 2023 Results Preview | Sector: Telecom

Exhibit 1: Expected quarterly performance summary

SALES (INR M) EBDITA (INR M) NET PROFIT (INR M)
CMP
RECO Var Var Var Var Var Var
Sector (INR) Dec-23 Dec-23 Dec-23
% YoY % QoQ % YoY % QoQ % YoY % QoQ
Bharti Airtel 1013 Buy 3,80,156 6.2 2.6 2,01,145 9.0 3.1 29,883 49.9 1.0
Indus Towers 203 Neutral 72,512 7.2 1.7 34,613 197.7 1.2 12,375 LP -4.4
Tata Comm 1767 Neutral 57,368 26.7 17.7 10,386 -3.6 2.3 3,173 -19.4 43.4
Vodafone Idea 17 Neutral 1,07,436 1.2 0.3 43,202 3.3 0.9 -68,565 Loss Loss
Telecom 6,17,471 7.0 3.3 2,89,345 16.3 2.5 -23,134 Loss Loss

Exhibit 2: Player-wise QoQ ARPU trends (INR) Exhibit 3: Player-wise QoQ ARPU growth trends (%)
Bharti (India) VIL RJio Bharti (India) VIL RJio

209
206
200

8
193

193
190

184
183

183
182
181

6
179
178
178

177
176

5
168

3
163

3
2

2
2
153

152

11
203

11
1
146
146

144

143

4
3
4

5
4

6
9

3
5
4
1
2

0
0
0

1
1
1
142
139
138

135

135
131
128
124
115

-3
109

-13
-8
104

4QFY21-12
1Q

2Q
2Q

3Q

4Q

1Q

3Q

4Q

1Q

2Q

3QE

4QE

3QFY21

1QFY23

3QFY24E
1QFY22

2QFY22

3QFY22

4QFY22

2QFY23

3QFY23

4QFY23

1QFY24

2QFY24
FY22 FY23 FY24E

Sources: Company, MOFSL Sources: Company, MOFSL

Exhibit 4: Player-wise QoQ data traffic trends (b GB) Exhibit 5: Player-wise QoQ growth trends in data traffic (%)
Bharti (India) VIL RJio
Bharti (India) VIL RJio
38.0
37.0
36.3
33.2

22
30.3
29.0
28.2

17
25.9
24.6
23.4
23.0

13
13
12
20.3

19.8

3 11

10
10
10
17.7
16.1

9
15.3

9
14.2

8
13.9
13.5

7
12.6
11.8

6
11.3
11.3

6
5
5

5
10.8

5
5
5

4
4

3
3
3
3

2
2
2

1
0
0
7.6
6.7
6.1
6.0
5.8
5.8
5.7
5.5
5.5

5.4
5.2

5.2

0
3QFY22 -5

2QFY24
3QFY21

4QFY21

1QFY22

2QFY22

4QFY22

1QFY23

2QFY23

3QFY23

4QFY23

1QFY24

3QFY24E
1Q

2Q

3Q

4Q

1Q

2Q

3Q

4Q

1Q

2Q

3QE

4QE

FY22 FY23 FY24E

Sources: Company, MOFSL Sources: Company, MOFSL

Exhibit 6: Aggregate India Wireless revenue and growth trends (QoQ, %)

Agg. India wireless revenue (INR b) Agg. India wireless revenue growth (QoQ, %)
10
5 9 10
7 8
5 5
2 3 4 2 3 1 1 3
1 1 1
0 0
381

-2
-5 -6 -6 -6 -5
-9
2QFY19 421
3QFY19 397
4QFY19 418
1QFY20 420

2QFY24 651
2QFY17 484
3QFY17 458
4QFY17 431
1QFY18 429
2QFY18 458

4QFY18 422

2QFY20 423
3QFY20 445
4QFY20 481
1QFY21 492
2QFY21 535
3QFY21 564
4QFY21 529
1QFY22 501
2QFY22 516
3QFY22 538
4QFY22 591
1QFY23 602
2QFY23 621
3QFY23 626
4QFY23 634
1QFY24 631
3QFY18 416

-10
1QFY19

Sources: TRAI, MOFSL

January 2024 238

 December 2023 Results Preview | Sector: Telecom

Exhibit 7: Aggregate India Wireless subscriber and growth trends (MoM, %)

Wireless Subscriber (m) Wireless Subscriber net additions (m)

1 3 2 1 1 -4 -2 -1 0 0 -1 2 -1 0 3 2 2 1
0 -4 1 1 0
-9
-13

1,146

1,143

1,150
1,166
1,167
1,155
1,145
1,142
1,142
1,143

1,147
1,148
1,149
1,145
1,144
1,143
1,143

1,142
1,144
1,143
1,143
1,144
1,146
1,148

1,151
Dec-21

Aug-22

Aug-23
Mar-22

Dec-22

Mar-23
Oct-21

Jul-22

Oct-22

Jul-23

Oct-23
Jun-22

Jun-23
Jan-22

Jan-23
Apr-22

Apr-23

Sep-23
Feb-22

Sep-22

Feb-23
Nov-21

Nov-22
May-22

May-23
Sources: TRAI, MOFSL

Exhibit 8: Relative performance – three-months (%) Exhibit 9: Relative performance – one-year (%)
Nifty Index MOFSL Telecom Index Nifty Index MOFSL Telecom Index
160
104
140
100
120
96
100
92
80
88 Dec-22 Mar-23 Jun-23 Sep-23 Dec-23
Dec-22 Jan-23 Feb-23 Mar-23

Sources: Bloomberg, MOFSL Sources: Bloomberg, MOFSL

Exhibit 10: Comparative valuation

CMP EPS (INR) PE (x) PB (x) ROE (%)
Company Name INR Reco
FY24E FY25E FY26E FY24E FY25E FY26E FY24E FY25E FY26E FY24E FY25E FY26E
Telecom -61 9,950 99.3 24.9 25.1 20.2 -40.8 0.3 20.4
Bharti Airtel 1,013 Buy 20.4 30.5 36.9 49.7 33.2 27.4 5.3 4.6 3.9 12.4 14.8 15.4
Indus Towers 203 Neutral 18.9 19.4 21.8 10.7 10.4 9.3 2.1 1.7 1.5 21.5 18.2 17.1
Tata Comm 1,767 Neutral 46.4 55.2 79.6 38.0 32.0 22.2 20.0 13.4 8.8 65.7 50.2 48
Vodafone Idea 17 Neutral -10.5 -8.3 -7.4 -1.6 -2.1 -2.3 -0.5 -0.4 -0.4 NM NM NM

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 December 2023 Results Preview | Sector: Telecom

Exhibit 11: Wireless KPI comparison

FY22 FY23 FY24E YoY QoQ
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE (%) (%)
EOP Wireless SUBS (m)
Bharti (India) 321 323 323 326 327 328 332 335 339 342 345 348 4.0 0.9
VIL 255 253 247 244 240 234 229 226 221 220 218 217 -4.5 -0.7
RJio 441 430 421 410 420 428 433 439 449 460 469 478 8.3 2.0
Avg. Wireless Subs (m)
Bharti (India) 321 322 323 324 327 328 330 334 337 340 344 347 4.2 1.0
VIL 262 254 250 246 242 237 232 227 224 221 219 218 -5.4 -0.7
RJio 433 435 425 416 415 424 430 436 444 454 464 474 7.9 2.2
ARPU (INR/month)
Bharti (India) 146 153 163 178 183 190 193 193 200 203 206 209 6.8 1.5
VIL 104 109 115 124 128 131 135 135 139 142 143 146 6.2 1.0
RJio 138 144 152 168 176 177 178 179 181 182 183 184 2.7 0.7
MOU/Sub (min)
Bharti (India) 1,044 1,053 1,061 1,081 1,104 1,082 1,094 1,122 1,138 1,123 1,134 1,146 3.7 1.0
VIL 641 630 620 610 620 599 613 623 627 613 619 625 1.0 1.0
RJio 815 835 901 962 1004 968 984 1001 1006 976 976 976 -0.8 0.0
Wireless traffic (B min)
Bharti (India) 1,002 1,020 1,030 1,051 1,079 1,063 1,082 1,124 1,149 1,148 1,170 1,192 8.1 1.9
VIL 503 480 465 449 450 427 426 425 421 406 407 408 -4.4 0.3
RJio 1060 1090 1150 1200 1250 1230 1270 1310 1340 1330 1320 1344 4.0 -0.7
Data usage/Sub (Gb)
Bharti (India) 18.9 19.1 18.7 19.2 19.9 20.8 20.8 20.8 21.6 22.2 23.1 24.0 11.2 3.9
VIL 13.3 13.5 12.8 12.9 13.3 14.1 14.2 14.2 14.7 14.9 15.7 16.5 10.4 5.0
RJio 15.6 17.6 18.3 19.7 20.8 22.2 22.5 23.2 24.9 26.6 26.6 26.8 18.3 -0.2
Data traffic (B Gb)
Bharti (India) 10.8 11.3 11.3 11.8 12.6 13.5 13.9 14.2 15.3 16.1 17.7 19.8 27.6 9.6
VIL 5.5 5.5 5.2 5.2 5.4 5.7 5.8 5.8 6.0 6.1 6.7 7.6 16.5 9.7
RJio 20.3 23.0 23.4 24.6 25.9 28.2 29.0 30.3 33.2 36.3 37.0 38.0 27.7 2.0
Sources: Company, MOFSL
Exhibit 12: Quarterly financials
FY22 FY23 FY24E YoY QoQ
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE (%) (%)
Revenue (INR b)
Bharti (India wireless) 143 152 161 176 182 190 194 195 204 210 215 220 11.0 2.5
Bharti (consolidated) 269 283 299 315 328 345 358 360 374 370 380 390 6.2 2.6
VIL 92 94 97 102 104 106 106 105 107 107 107 109 1.2 0.3
RJio 180 187 193 209 219 225 230 234 240 248 255 262 10.8 3.0
EBITDA (INR b)
Bharti (India wireless) 70 75 79 89 93 99 104 105 112 115 119 122 14.1 3.3
Bharti (consolidated) 130 138 147 160 165 176 185 187 196 195 201 207 9.0 3.1
VIL 37 39 38 46 43 41 42 42 42 43 43 44 3.3 0.9
RJio 86 90 95 105 110 115 120 122 126 130 134 137 11.3 3.2
EBITDA Margin (%)
Bharti (India wireless) 49.2 49.2 49.4 50.6 51.2 52.4 53.8 53.8 54.8 54.9 55.3 55.6 155bps 44bps
Bharti (consolidated) 48.3 48.8 49.2 50.9 50.4 51.0 51.5 51.9 52.3 52.7 52.9 53.0 137bps 23bps
VIL 40.5 41.1 39.3 45.4 41.6 38.6 39.4 40.0 39.0 40.0 40.2 40.9 85bps 25bps
RJio 47.9 48.0 49.2 50.3 50.1 51.0 52.2 52.2 52.3 52.3 52.5 52.5 24bps 13bps
PAT (INR b)
Bharti (consolidated) 2.8 11.3 8.3 20.1 16.1 21.5 15.9 30.1 16.1 13.4 29.9 22.0 88.2 122.9
VIL (73.2) (71.3) (72.3) (65.6) (73.0) (76.0) (79.9) (64.2) (78.4) (87.4) (68.6) (68.5) -14.2 -21.5
RJio 35 35 36 42 43 45 46 47 49 51 53 55 13.3 3.9
EPS (INR)
Bharti 0.5 2.1 1.5 3.6 2.9 3.8 2.8 5.3 2.8 2.4 5.3 3.9 85.4 122.9
VIL (2.5) (2.5) (2.5) (2.0) (2.3) (2.4) (2.5) (1.3) (1.6) (1.8) (1.4) (1.4) -43.4 -21.5
RJio 0.8 0.8 0.8 0.9 1.0 1.0 1.0 1.0 1.1 1.1 1.2 1.2 13.3 3.9
Sources: Company, MOFSL

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 December 2023 Results Preview | Sector: Telecom

The tables below provide a snapshot of the actual and estimated numbers of companies under the MOFSL Coverage
Universe. Highlighted columns indicate the quarter/financial year under review.

Bharti Airtel Buy

CMP: INR,1013| TP: INR1,200 (+18%) EPS CHANGE (%): FY24|25: -1|-1
 We expect 2.6% revenue growth on a sequential basis, led  We expect India Wireless growth, supported by 1%/1.5%
by 2.5%/2% QoQ growth in India Wireless/Airtel Africa QoQ growth in Subscribers/ARPU
 Expect EBITDA margin to improve 20bp to 52.9%  Expect quarterly capex to remain elevated
Consolidated - Quarterly Earning Model (INR b)
Y/E March FY23 FY24E
FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q
Revenue 328 345 358 360 374 370 380 390 1,391 1,515
YoY Change (%) 22.2 21.9 19.9 14.3 14.1 7.3 6.2 8.3 19.4 8.9
Total Expenditure 163 169 174 173 178 175 179 183 679 716
EBITDA 165 176 185 187 196 195 201 207 713 799
YoY Change (%) 27.3 27.4 25.5 16.6 18.6 10.9 9.0 10.5 23.9 12.1
Depreciation 88 89 93 94 97 97 102 108 364 404
Net Finance cost 45 49 47 52 56 52 50 54 193 213
Other Income 4 6 -1 9 9 9 11 12 17 41
PBT before EO expense 36 43 44 50 53 55 60 56 172 224
Extra-Ord expense 0 0 7 0 34 16 0 0 7 50
PBT 36 43 37 50 19 39 60 56 166 174
Tax 11 13 11 8 3 18 20 19 43 61
Rate (%) 31.3 30.2 29.2 15.7 18.0 46.9 33.5 33.5 25.8 34.9
Minority Interest & P/L of Asso. Cos. 9 8 10 12 -1 8 10 15 39 32
Reported PAT 16 21 16 30 16 13 30 22 83 81
Adj PAT 15 21 20 26 29 30 30 22 82 111
YoY Change (%) 469.4 245.7 147.0 39.4 91.3 44.2 49.9 -15.1 131.2 35.5
E: MOFSL Estimates

Indus Towers Neutral

CMP: INR203 | TP: INR190 (-6%) EPS CHANGE (%): FY24|25: 0|0
 We expect the number of tenants and rental rates to grow  We expect tower additions of 2,000 in 3QFY24.
1% on a sequential basis
 Adjusted revenue is likely to grow 2% QoQ/7% YoY  Adj. EBITDA margin is likely to decline 30bp QoQ
Quarterly Performance (INR b)
Y/E March FY23 FY24E
FY23 FY24E
(Consolidated) 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q
Revenue from operations 69 80 68 68 71 71 73 73 284 288
YoY Change (%) 1.5 15.9 -2.3 -5.1 2.6 -10.5 7.2 8.4 10.6 1.4
Total Expenditure 46 52 56 33 36 37 38 38 187 149
EBITDA 23 28 12 34 35 34 35 35 97 138
YoY Change (%) -35.7 -22.4 -68.6 -15.5 53.8 21.7 197.7 1.4 -26.2 43.2
Depreciation 13 13 14 13 14 15 16 16 53 61
Interest 4 4 4 3 4 2 3 3 15 12
Other Income 1 1 1 1 1 1 1 1 4 3
PBT before EO expense 6 12 -5 19 18 17 17 16 33 68
Extra-Ord expense 0 0 5 0 0 0 0 0 5 0
PBT 6 12 -10 19 18 17 17 16 28 68
Tax 2 3 -2 5 5 5 4 4 7 17
Rate (%) 25.8 25.8 25.6 26.1 25.5 25.9 25.2 25.2 26.1 25.4
Reported PAT 5 9 -7 14 13 13 12 12 20 51
YoY Change (%) -66.3 -44.1 -145.1 -23.5 182.4 48.5 -462.2 -13.3 -51.7 111.8
E: MOFSL Estimates

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 December 2023 Results Preview | Sector: Telecom

Reliance Jio
CMP: INR | TP: INR EPS CHANGE (%): FY24|25: 0|0
 We expect 3% revenue growth on a sequential basis, led by
 EBITDA margin is likely to improve 20bp QoQ and we
a 2%/1% QoQ growth in subscribers/ARPU.
expect EBITDA of 52.5%.
 ARPU expects to improve to INR183 with subscribers at
 We expect capex to be elevated in this quarter.
469m.
Quarterly Earning Model (INR b)
Y/E March FY23 FY24E
FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q
Net Revenue 219 225 230 234 240 248 255 262 908 1,004
YoY Change (%) 21.6 20.2 18.9 11.9 9.9 9.9 10.8 11.9 17.9 10.6
Total Expenditure 109 110 110 112 115 118 121 124 441 478
EBITDA 110 115 120 122 126 130 134 137 467 526
Margins (%) 50.1 51.0 52.2 52.2 52.3 52.3 52.5 52.5 51.4 52.4
Depreciation 42 45 48 50 52 53 54 54 185 212
Finance Cost 10 10 10 10 10 10 10 10 41 41
Other Income 1 1 1 1 1 1 1 1 4 4
PBT 58 61 62 63 65 68 71 73 244 277
Tax 15 15 16 16 17 17 18 19 62 71
Rate (%) 25% 25% 25% 25% 26% 26% 26% 25% 25% 25%
PAT 43 45 46 47 49 51 53 55 182 207
Margins (%) 19.8 20.1 20.2 20.2 20.2 20.4 20.6 20.9 20.1 20.6
YoY Change (%) 24% 28% 28% 13% 12% 12% 13% 16% 23% 13%

Tata Communications Neutral

CMP: INR1,767 | TP: INR1,740 (-2%) EPS CHANGE (%): FY24|25: 0|0
 We expect a 3% QoQ decline in Voice revenue  We expect margins to remain under pressure due to the
 DPS revenue expected to grow 8% QoQ recent acquisition and ongoing growth in opex investments
 We expect an improved deals pipeline to drive revenue

Cons. Quarterly Earning Model (INR b)

Y/E March FY23 FY24E
FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q
Revenue 43.1 44.3 45.3 45.7 47.7 48.7 57.4 58.9 178.4 212.7
YoY Change (%) 5.1 6.2 8.2 7.2 10.7 10.0 26.7 29.0 6.7 19.3
Total Expenditure 32.3 33.0 34.5 35.3 37.5 38.6 47.0 48.1 135.2 171.1
EBITDA 10.8 11.3 10.8 10.3 10.2 10.2 10.4 10.9 43.2 41.7
YoY Change (%) 9.2 1.5 -0.5 -1.1 -4.9 -10.1 -3.6 5.2 2.2 -3.5
Depreciation 5.4 5.5 5.5 6.2 5.8 6.1 6.1 6.5 22.6 24.5
Interest 0.8 1.0 1.2 1.3 1.3 1.4 1.4 1.4 4.3 5.5
Other Income 2.3 0.4 0.3 0.6 1.9 0.3 1.3 2.2 3.6 5.7
PBT before EO expense 6.9 5.2 4.3 3.5 5.0 3.0 4.1 5.2 19.9 17.4
Exceptional (gain)/loss 0.0 -0.8 0.0 0.0 0.0 0.0 0.0 0.0 -0.8 0.0
PBT 6.9 5.9 4.3 3.5 5.0 3.0 4.1 5.2 20.6 17.4
Tax 1.6 0.7 0.4 0.3 1.3 0.8 1.0 1.3 3.0 4.4
Rate (%) 22.9 11.1 10.1 8.1 25.9 26.1 25.0 25.0 14.4 25.5
MI & P/L of Asso. Cos. -0.1 0.0 -0.1 -0.1 -0.1 0.0 -0.1 -0.1 -0.3 -0.3
Reported PAT 5.4 5.3 3.9 3.3 3.8 2.2 3.2 4.0 18.0 13.2
Adj PAT 5.4 4.6 3.9 3.3 3.8 2.2 3.2 4.0 17.2 13.2
YoY Change (%) 87.2 10.5 1.9 -15.5 -30.2 -51.5 -19.4 24.1 16.5 -23.1
E: MOFSL Estimates

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 December 2023 Results Preview | Sector: Telecom

Vodafone Idea Neutral

CMP: INR 17|TP: INR 15 (-10%)
 We expect a 1% sequential increase in blended ARPU,
offset by a subscriber decline of 1%, leading to flat revenue
growth
 ARPU is expected to grow to INR143, led by an increase in 
4G subscriber mix
EPS CHANGE (%): FY24|25: -1|-3
 EBITDA margin is likely to increase 20bp on a sequential
basis to 40.2%
Without fundraising, capex is projected to be minimal

Consolidated - Quarterly Earning Model (INR b)

Y/E March FY23 FY24E
FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q
Revenue 104 106 106 105 107 107 107 109 422 430
YoY Change (%) 13.7 12.8 9.3 2.9 2.4 1.0 1.2 3.2 9.5 1.9
Total Expenditure 61 65 64 63 65 64 64 64 254 258
EBITDA 43 41 42 42 42 43 43 44 168 172
YoY Change (%) 16.7 6.1 9.5 -9.4 -4.0 4.5 3.3 5.5 4.9 2.3
Depreciation 58 57 59 57 56 57 58 59 230 229
Net Finance Costs 58 60 63 49 64 65 54 54 230 237
PBT before EO expense -73 -76 -80 -64 -78 -79 -69 -68 -293 -295
Extra-Ord expense 0 0 0 0 0 0 0 0 0 0
PBT -73 -76 -80 -64 -78 -79 -69 -68 -293 -295
Tax 0.0 0.0 0.0 0.0 0.0 8.2 0.0 0.0 0.0 8.2
Rate (%) -0.1 -0.1 0.0 0.1 0.0 -10.3 0.0 0.0 0.0 -2.8
Reported PAT -73 -76 -80 -64 -78 -87 -69 -68 -293 -303
Adj PAT -73 -76 -80 -64 -78 -87 -69 -68 -293 -303
YoY Change (%) -2.7 6.3 10.7 -2.3 7.4 15.0 -14.2 7.1 3.1 3.4
E: MOFSL Estimates

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 December 2023 Results Preview | Sector: Others

Others | Various Sectors

The tables below provide a snapshot of actual and estimated numbers for companies under the MOFSL coverage
universe. Highlighted columns indicate the quarter/financial year under review.

APL Apollo Tubes Buy

CMP INR1,526 | TP: INR1,850 (+21%) EPS CHANGE (%): FY24|25: -10 |-6
 The company registered flattish volume YoY of ~603,659  Revenue is likely to decline by ~2% YoY on the back of fall
MT in 3QFY24 (down 11% QoQ) in realizations
 EBITDA is expected to increase 2% YoY, assuming an  Price of primary steel HRC continues to be a key
EBITDA/MT of ~INR4,622 (up 2% YoY) monitorable
Consolidated - Quarterly Earning (INR m)
Y/E March FY23 FY24 FY23 FY24
1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
Gross Sales 34,386 39,692 43,271 44,311 45,449 46,304 42,308 52,292 1,61,660 1,86,353
YoY Change (%) 35.7 28.7 34.0 5.1 32.2 16.7 -2.2 18.0 23.8 15.3
Total Expenditure 32,446 37,373 40,543 41,082 42,377 43,054 39,518 48,368 1,51,444 1,73,317
EBITDA 1,939 2,319 2,729 3,229 3,072 3,250 2,790 3,923 10,216 13,036
Margins (%) 5.6 5.8 6.3 7.3 6.8 7.0 6.6 7.5 6.3 7.0
Depreciation 294 276 345 468 409 413 480 500 1,383 1,803
Interest 100 136 186 249 271 266 250 240 671 1,028
Other Income 83 116 93 180 217 196 200 210 472 823
PBT 1,629 2,023 2,290 2,692 2,608 2,767 2,260 3,393 8,633 11,029
Tax 422 521 598 673 672 738 569 854 2,215 2,833
Rate (%) 25.9 25.7 26.1 25.0 25.8 26.7 25.2 25.2 25.7 25.7
Reported PAT 1,207 1,502 1,692 2,018 1,936 2,029 1,691 2,539 6,419 8,195
Adj PAT 1,207 1,502 1,692 2,018 1,936 2,029 1,691 2,539 6,419 8,195
YoY Change (%) -28.4 2.8 32.3 14.3 60.5 35.1 0.0 25.8 3.7 27.7
Margins (%) 3.5 3.8 3.9 4.6 4.3 4.4 4.0 4.9 4.0 4.4

Coromandel International Buy

CMP INR1,245 | TP: INR1,430 (+16%) EPS CHANGE (%): FY24|25: -4|-4
 Fertilizer manufacturing volumes are expected to decline  Fertilizer manufacturing (NPK and DAP) EBIDTA/MT is
9% YoY, while trading volumes are expected to decline 5% expected to be ~INR4,600
YoY
 Crop Protection revenue is expected to decline ~5% YoY in  The raw material and product pricing scenario to be the
3QFY24 key monitorable
Quarterly Performance (INR m)
Y/E March FY23 FY24 FY23 FY24E
Consolidated 1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
Net Sales 57,291 1,01,134 83,096 54,758 56,934 69,881 63,508 51,812 2,96,279 2,42,134
YoY Change (%) 56.4 64.5 63.8 29.5 -0.6 -30.9 -23.6 -5.4 55.0 -18.3
Total Expenditure 50,437 90,564 75,290 50,726 49,842 59,294 58,064 47,800 2,67,017 2,15,001
EBITDA 6,854 10,570 7,806 4,032 7,092 10,587 5,443 4,011 29,262 27,133
Margins (%) 12.0 10.5 9.4 7.4 12.5 15.2 8.6 7.7 9.9 11.2
Depreciation 446 457 471 446 481 540 525 500 1,820 2,045
Interest 266 542 568 524 405 462 320 280 1,900 1,467
Other Income 536 311 396 469 445 448 277 328 1,711 1,498
PBT 6,678 9,881 7,163 3,531 6,651 10,033 4,876 3,559 27,253 25,119
Tax 1,703 2,481 1,794 901 1,674 2,450 1,227 896 6,879 6,247
Rate (%) 25.5 25.1 25.0 25.5 25.2 24.4 25.2 25.2 25.2 24.9
MI & P/L of Asso. Cos. -15 -6 100 166 36 15 105 174 245 330
Reported PAT 4,991 7,406 5,269 2,464 4,940 7,569 3,544 2,489 20,129 18,542
Adj PAT 4,991 7,406 5,269 2,464 4,940 7,569 3,544 2,489 20,129 18,542
YoY Change (%) 47.8 42.6 38.1 -15.0 -1.0 2.2 -32.7 1.0 31.7 (7.9)
Margins (%) 8.7 7.3 6.3 4.5 8.7 10.8 5.6 4.8 6.8 7.7

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 December 2023 Results Preview | Sector: Others

EPL Buy
CMP INR201 | TP: INR270 (+34%) EPS CHANGE (%): FY24|25: -6 |-2
 Revenue is expected to grow 8% YoY on the back of broad-  Increasing the share of fully recyclable tubes will be the
based growth across geographies key focus area
 EBITDA margin recovery is likely to continue with ~70bp  Ramping up of the Brazil plant and prices of raw materials
improvement on a sequential basis will be the key monitorables

Consolidated - Quarterly Earning (INR m)

Y/E March FY23 FY24E FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
Gross Sales 8,318 9,481 9,449 9,693 9,102 10,016 10,229 10,739 36,941 40,086
YoY Change (%) 4.1 9.0 7.0 10.1 9.4 5.6 8.3 10.8 7.6 8.5
Total Expenditure 7,062 7,995 7,959 8,147 7,512 8,206 8,310 8,807 31,163 32,835
EBITDA 1,256 1,486 1,490 1,546 1,590 1,810 1,919 1,932 5,778 7,251
Margins (%) 15.1 15.7 15.8 15.9 17.5 18.1 18.8 18.0 15.6 18.1
Depreciation 652 664 699 790 800 836 850 860 2,805 3,346
Interest 122 157 189 206 235 306 280 260 674 1,081
Other Income 42 68 43 268 100 96 125 140 421 461
PBT before EO expense 524 733 645 818 655 764 914 952 2,720 3,285
Extra-Ord expense 11 0 0 0 0 0 0 0 11 0
PBT 513 733 645 818 655 764 914 952 2,709 3,285
Tax 141 249 10 -27 106 254 247 257 373 864
Rate (%) 27.5 34.0 1.6 -3.3 16.2 33.2 27.0 27.0 13.8 26.3
MI & Profit/Loss of Asso. Cos. -38 -22 -7 -2 -6 -5 -8 -2 -69 -21
Reported PAT 334 462 628 843 543 505 659 693 2,267 2,400
Adj PAT 345 462 628 843 543 505 659 693 2,278 2,400
YoY Change (%) -40.4 -8.9 10.0 73.1 57.4 9.3 5.0 -17.8 6.3 5.4
Margins (%) 4.1 4.9 6.6 8.7 6.0 5.0 6.4 6.5 6.2 6.0

Godrej Agrovet Neutral

CMP INR558 | TP: INR510 (-9%) EPS CHANGE (%): FY24|25: +6|-4
 Revenue in the Animal Feed business is expected to grow  EBITDA margins likely to slightly improve to 6.1% from
~3% YoY, driven by volume growth 5.9% in 3QFY23 on the back of broad-based recovery
 The performance outlook on Astec and domestic Crop  Raw material (such as maize and soybean) and palm oil
Protection will be a key focus area. prices are the key monitorables.
Consolidated - Quarterly Earning (INR m)
Y/E March FY23 FY24E FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
Gross Sales 25,099 24,453 23,235 20,950 25,102 25,709 23,313 22,342 93,737 96,466
YoY Change (%) 25.9 13.5 11.8 0.7 0.0 5.1 0.3 6.6 12.9 2.9
Total Expenditure 23,483 22,950 21,872 20,204 23,173 23,694 21,891 21,163 88,509 89,921
EBITDA 1,616 1,503 1,363 746 1,929 2,014 1,422 1,180 5,228 6,546
Margins (%) 6.4 6.1 5.9 3.6 7.7 7.8 6.1 5.3 5.6 6.8
Depreciation 449 461 469 476 528 529 532 535 1,855 2,124
Interest 216 257 249 270 295 279 255 260 991 1,089
Other Income 77 88 76 126 115 112 100 127 367 455
PBT before EO expense 1,028 873 721 127 1,222 1,318 735 512 2,749 3,788
Extra-Ord expense 0 0 -708 0 0 0 0 0 -708 0
PBT 1,028 873 1,429 127 1,222 1,318 735 512 3,457 3,788
Tax 279 219 334 -8 353 369 185 129 823 1,037
Rate (%) 27.1 25.1 23.4 -6.6 28.9 28.0 25.2 25.2 23.8 27.4
MI & Profit/Loss of Asso. Cos. -77 -64 -69 -175 -202 -104 -76 -193 -385 -575
Reported PAT 827 718 1,164 310 1,071 1,053 626 576 3,019 3,326
Adj PAT 827 718 640 310 1,071 1,053 626 576 2,495 3,326
YoY Change (%) -22.0 -34.3 -17.8 -74.6 29.5 46.7 -2.2 85.7 -40.6 33.3
Margins (%) 3.3 2.9 2.8 1.5 4.3 4.1 2.7 2.6 2.7 3.4

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Havells India Buy

CMP INR1,361 | TP: INR1,560 (+15%) EPS CHANGE (%): FY24|25: -3.2 |-3.3
 We estimate revenue to grow 7% YoY in 3QFY24.  EBITDA is estimated to grow 5% YoY to INR4.5b, led by
 Revenue from C&W/Switchgear is estimated to grow higher volume.
7%/8% YoY. While, Lloyd revenue should grow 19% YoY.  Expect EBITDA margin to be flat YoY at ~10%.
Consolidated - Quarterly Earning Model (INR m)
Y/E March FY23 FY24 FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
Net Sales 42,445 36,689 41,197 48,592 48,338 39,003 44,203 58,114 1,68,923 1,89,658
YoY Change (%) 63.4 13.9 12.8 10.0 13.9 6.3 7.3 19.6 21.6 12.3
EBITDA 3,615 2,871 4,237 5,271 4,020 3,734 4,468 6,460 15,995 18,681
YoY Change (%) 2.4 -35.3 -3.8 1.3 11.2 30.1 5.4 22.5 -9.0 16.8
Margins (%) 8.5 7.8 10.3 10.8 8.3 9.6 10.1 11.1 9.5 9.8
Depreciation 721 721 746 774 763 812 828 890 2,961 3,292
Interest 98 68 73 98 85 93 95 97 336 370
Other Income 476 433 399 467 648 525 575 579 1,775 2,327
Extra-ordinary items - - - - - - - - - -
PBT before EO expense 3,273 2,515 3,818 4,867 3,821 3,353 4,120 6,052 14,473 17,346
Tax 841 646 978 1,287 950 862 1,060 1,617 3,752 4,489
Rate (%) 25.7 25.7 25.6 26.4 24.9 25.7 25.7 26.7 25.9 25.9
Reported PAT 2,432 1,869 2,839 3,580 2,871 2,491 3,060 4,435 10,720 12,857
YoY Change (%) 3.8 (38.0) (7.2) 1.4 18.1 33.3 7.8 23.9 (10.3) 19.9
Adj PAT 2,432 1,869 2,839 3,580 2,871 2,491 3,060 4,435 10,720 12,857
YoY Change (%) 3.8 (38.0) (7.2) 1.4 18.1 33.3 7.8 23.9 (10.3) 19.9

IndiaMART Buy
CMP: INR2725 | TP: INR3240 (+19%) EPS CHANGE (%): FY24|25: +0.2|+0.4
 Revenue is expected to grow at 22% YoY in 3QFY24.  Collections are expected to be higher at around 20%
Expect ~10-11% YoY growth in ARPU.
 Expect YoY net additions to be lower and should support  Outlook on paid subscribers and margin performance are
margin expansion in 3Q the key monitorables.

Consolidated quarterly earnings model (INR m)

Y/E March FY23 FY24E FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
Gross Sales 2,246 2,406 2,514 2,688 2,821 2,947 3,065 3,253 9,854 12,086
Change (YoY %) 23.7 31.9 33.7 33.5 25.6 22.5 21.9 21.0 30.8 22.7
Total Expenditure 1,604 1,734 1,812 2,027 2,048 2,147 2,198 2,384 7,177 8,778
EBITDA 642 672 702 661 773 800 867 869 2,677 3,309
Margin (%) 28.6 27.9 27.9 24.6 27.4 27.1 28.3 26.7 27.2 27.4
Depreciation 63 76 86 86 74 80 79 81 311 313
Interest 12 26 22 21 22 23 20 20 81 85
Other Income 10 466 352 307 571 346 352 387 1,135 1,656
PBT before EO expense 577 1,036 946 861 1,248 1,043 1,120 1,156 3,420 4,566
Extra-Ord. expense 0 0 -516 0 18 0 0 0 -516 18
PBT 577 1,036 1,462 861 1,230 1,043 1,120 1,156 3,936 4,548
Tax 40 243 240 198 293 239 257 265 721 1,053
Rate (%) 6.9 23.5 16.4 23.0 23.8 22.9 22.9 22.9 18.3 23.2
MI and Profit/Loss of Asso. Cos. 70 109 94 105 106 110 110 110 378 436
Reported PAT 467 684 1,128 558 831 694 753 781 2,837 3,059
Adj. PAT 467 684 612 558 849 694 753 781 2,321 3,077
Change (YoY %) -46.9 -16.8 -12.8 -2.8 81.8 1.5 23.1 39.9 -22.0 32.6
Margin (%) 20.8 28.4 24.3 20.8 30.1 23.5 24.6 24.0 23.6 25.5

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Indian Hotels Buy

CMP INR436 | TP: 500 (+15%)
 Revenue is expected to grow 13.5% YoY, while EBIDTA
margin is expected to be ~37% in 3QFY24
 Performance of the international subsidiaries and new
businesses will be the key monitorables
EPS CHANGE (%): FY24|25: -3|-4
 Demand scenario in key markets, improvement in
occupancy, and ARR are the key focus areas

Consolidated - Quarterly Earning (INRm)

Y/E March FY23 FY24E FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
Gross Sales 12,661 12,326 16,858 16,254 14,664 14,332 19,134 17,717 58,099 65,847
YoY Change (%) 267.5 69.2 51.7 86.4 15.8 16.3 13.5 9.0 90.1 13.3
Total Expenditure 8,882 9,386 10,886 10,899 10,562 10,784 12,050 11,561 40,054 44,957
EBITDA 3,779 2,940 5,972 5,355 4,102 3,548 7,084 6,156 18,046 20,889
Margins (%) 29.8 23.9 35.4 32.9 28.0 24.8 37.0 34.7 31.1 31.7
Depreciation 1,026 1,026 1,033 1,076 1,091 1,112 1,170 1,190 4,161 4,563
Interest 624 600 567 570 565 591 540 510 2,361 2,206
Other Income 271 250 577 291 493 477 550 450 1,389 1,970
PBT before EO expense 2,401 1,564 4,949 4,000 2,939 2,322 5,924 4,906 12,914 16,092
Extra-Ord expense 91 -123 -1 0 0 0 0 0 -33 0
PBT 2,309 1,687 4,950 4,000 2,939 2,322 5,924 4,906 12,946 16,092
Tax 648 443 1,161 980 833 723 1,777 1,472 3,232 4,805
Rate (%) 28.1 26.3 23.4 24.5 28.4 31.1 30.0 30.0 25.0 29.9
MI & Profit/Loss of Asso. Cos. -39 28 -38 -263 -118 -70 -42 -289 -312 -519
Reported PAT 1,701 1,216 3,827 3,283 2,224 1,669 4,189 3,723 10,026 11,806
Adj PAT 1,769 1,123 3,826 3,283 2,224 1,669 4,189 3,723 10,001 11,806
YoY Change (%) NA NA 357.2 430.2 25.7 48.6 9.5 13.4 NA 17.8
Margins (%) 14.0 9.1 22.7 20.2 15.2 11.6 21.9 21.0 17.2 17.9

Info Edge Neutral

CMP: INR5,148 | TP: INR4,720 (-8%) EPS CHANGE (%): FY23|24: +7.8|+4.4
 Expect pressure on recruitment vertical to continue due to  Real Estate vertical is expected to remain under pressure
slowdown in IT hiring. Growth to remain weak. owing to increased interest rates.
 EBIT margin is likely to moderate from the 2Q peak due to  Key monitorable: The outlook on demand for IT and
increase in direct expenses. investee companies.
Standalone quarterly performance
Y/E March FY23 FY24E FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
Revenue 5,077 5,318 5,552 5,640 5,843 5,930 5,982 6,031 21,586 23,785
YoY (%) 58.8 51.2 33.4 23.8 15.1 11.5 7.7 6.9 39.9 10.2
Salary costs 2,244 2,259 2,262 2,323 2,464 2,435 2,509 2,497 9,087 9,905
Ad and Promotion costs 876 831 746 703 680 686 748 784 3,155 2,898
Other Expenses 326 389 376 411 432 398 407 410 1,502 1,648
EBITDA 1,631 1,840 2,168 2,203 2,266 2,411 2,318 2,339 7,842 9,334
EBITDA Margin (%) 32.1 34.6 39.1 39.1 38.8 40.7 38.7 38.8 36.3 39.2
Depreciation 99 105 115 129 153 176 150 151 447 629
EBIT Margin (%) 30.2 32.6 37.0 36.8 36.2 37.7 36.2 36.3 34.3 36.6
Other Income 419 499 396 437 578 636 479 482 1,751 2,174
PBT bef. Extra-ordinary 1,942 2,225 2,440 2,500 2,667 2,824 2,617 2,641 9,107 10,749
Provision for Tax 457 544 523 524 668 687 628 634 2,047 2,617
ETR (%) 23.6 24.4 21.4 20.9 25.0 24.3 24.0 24.0 22.5 24.3
PAT bef. Minority 1,484 1,681 1,917 1,977 1,999 2,137 1,989 2,007 7,059 8,132
EOI 0 0 -2,760 -187 0 -50 0 0 -2,947 0
Adjusted PAT 1,484 1,681 -843 1,789 1,999 2,187 1,989 2,007 4,112 8,132
QoQ (%) 23.0 13.3 -150.1 -312.4 11.7 9.4 -9.1 0.9
YoY (%) 47.0 -98.0 -125.1 48.3 34.7 30.1 -336.0 12.2 -95.4 97.8
EPS (INR) 11.5 13.1 14.9 13.8 15.5 16.6 15.4 15.5 31.8 62.8

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InterGlobe Aviation Neutral

CMP INR2,976 | TP: INR 3,295 (+11%) EPS CHANGE (%): FY23|24: -30|-13
 Expect RPK at 32b (up 31% YoY), PLF at 90.2% (up from  According to our database, average fare prices were
83.3% in 2QFY24) and ASK of 35.5b (up 23% YoY), with higher by 27% on 1-month forward bookings and 35% on
recovery post the festive season. 15-day forward bookings.
 Watch out for: outlook on incremental P&W engine-fitted  The most significant monitorable will be sustainable
aircraft being grounded in CY24; and commentary on earnings going forward in the near to medium term with
competition coming up in a big way. pressure mounting on IndiGo on various fronts.
Standalone Quarterly performance (INR b)
Y/E March FY23 FY24 FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
Net Sales 128.6 125.0 149.3 141.6 166.8 149.4 192.6 155.2 544.5 664.1
YoY Change (%) 327.5 122.8 60.7 76.5 29.8 19.6 29.0 9.6 110.0 22.0
EBITDAR 6.6 0.7 31.8 28.9 51.6 23.9 46.9 35.7 68.1 158.1
Margin (%) 5.2 0.6 21.3 20.4 30.9 16.0 24.4 23.0 12.5 23.8
Net Rentals 0.7 0.5 0.7 1.4 1.9 2.0 2.0 2.1 3.3 8.0
EBITDA 6.0 0.3 31.1 27.5 49.7 22.0 44.9 33.6 64.8 150.1
Margin (%) 4.6 0.2 20.9 19.4 29.8 14.7 23.3 21.6 11.9 22.6
Depreciation 11.7 12.4 13.4 13.5 14.0 15.5 15.6 16.1 51.0 61.2
Interest 6.6 7.3 8.3 9.2 9.5 10.2 10.3 10.3 31.3 40.4
Other Income 1.6 3.5 4.8 4.4 4.8 5.6 5.6 3.9 14.3 19.9
PBT -10.7 -15.9 14.2 9.2 30.9 1.9 24.6 11.0 -3.2 68.4
Reported PAT -10.7 -15.9 14.2 9.2 30.9 1.9 24.6 11.0 -3.2 68.4
EPS -27.7 -41.2 36.8 23.8 80.2 4.9 63.9 28.7 -8.2 177.7
YoY Change (%) Loss Loss 1,004.1 LP LP LP 73.5 20.6 LP LP
Operational Data
ASK (b) 27.5 27.7 28.8 30.4 32.7 35.3 35.5 35.7 114.4 139.1
YoY Change (%) 146% 75% 25% 49% 19% 27% 23% 17% 63% 22%
Load factor (%) 79.6 79.1 85.1 84.2 88.7 83.3 90.2 89.8 82.1 88.0
RPK (b) 21.9 21.9 24.5 25.6 29.0 29.4 32.0 32.0 93.9 122.4
YoY Change (%) 232% 96% 34% 64% 32% 34% 31% 25% 82% 30%
Yield (INR/RPK) 5.24 5.07 5.38 4.85 5.18 4.44 5.33 4.25 5.14 4.80

Kajaria Ceramics Buy

CMP INR1,309 | TP: INR1,620 (+24%) EPS CHANGE (%): FY24|25: -3.3 |-5.3
 We estimate sales volume to grow 6% YoY (up 2% QoQ)  EBITDA is estimated to grow 36% YoY supported by
in 3QFY24. Realization is estimated to decline 2% YoY higher volume and easing cost pressures.
(flat QoQ).  Adjusted net profit after MI is estimated to grow 47%
 Energy cost/sqm should drop 19% YoY leading to 4.2pp YoY to INR1.1b.
YoY improvement in gross margins.
Consolidated - Quarterly Earning Model (INR m)
Y/E March FY23 FY24 FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
Net Sales 10,082 10,778 10,911 12,048 10,642 11,216 11,510 14,322 43,819 47,691
YoY Change (%) 79.5 10.7 2.1 9.4 5.6 4.1 5.5 18.9 18.3 8.8
Total Expenditure 8,546 9,484 9,581 10,289 8,950 9,419 9,703 12,233 37,899 40,306
EBITDA 1,536 1,294 1,331 1,759 1,692 1,797 1,807 2,089 5,920 7,385
Margins (%) 15.2 12.0 12.2 14.6 15.9 16.0 15.7 14.6 13.5 15.5
Depreciation 324 337 325 343 305 361 379 466 1,329 1,511
Interest 36 32 83 72 53 43 48 176 223 319
Other Income 81 76 75 104 93 83 88 107 336 370
PBT before EO expense 1,257 1,002 997 1,448 1,427 1,477 1,468 1,553 4,705 5,925
Extra-Ord expense 0 37 0 43 0 0 0 0 79 0
PBT 1,257 966 997 1,406 1,427 1,477 1,468 1,553 4,625 5,925
Tax 328 277 261 298 336 366 369 419 1,163 1,489
Rate (%) 26.1 27.6 26.1 20.6 23.5 24.8 25.1 27.0 24.7 25.1
Adj PAT 930 661 737 1,076 1,091 1,110 1,100 1,134 3,404 4,436
MI & P/L of Asso. Cos. 7 -10 -7 28 16 31 5 -33 17 18
Adj PAT 923 671 743 1,048 1,075 1,080 1,095 1,168 3,386 4,417
YoY Change (%) 114.4 -42.2 -39.1 9.5 16.5 60.8 47.3 11.4 -10.2 30.5
Margins (%) 9.2 6.2 6.8 8.7 10.1 9.6 9.5 8.2 7.7 9.3

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Lemon Tree Hotels Buy

CMP INR119 | TP: INR150 (+26%)
 Revenue is expected to grow 27% YoY and EBIDTA margin
is expected to be ~49% in 3QFY24
 The demand scenario in key markets (Mumbai and Delhi)
and Occupancy/ARR trend are the key monitorables
EPS CHANGE (%): FY24|25: -17|+8
 Ramping up of Aurika Mumbai will be a key focus area.
 Any update on the management contract pipeline is a key
monitorable

Consolidated Quarterly Performance (INR m)

Y/E March FY23 FY24 FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
Gross Sales 1,920 1,967 2,335 2,527 2,223 2,272 2,963 3,025 8,750 10,483
YoY Change (%) 355.6 103.0 62.6 111.4 15.7 15.5 26.9 19.7 117.5 19.8
Total Expenditure 997 1,031 1,071 1,128 1,178 1,253 1,517 1,551 4,226 5,499
EBITDA 924 936 1,265 1,399 1,045 1,019 1,446 1,474 4,524 4,984
Margins (%) 48.1 47.6 54.2 55.4 47.0 44.8 48.8 48.7 51.7 47.5
Depreciation 245 250 236 235 228 226 340 350 966 1,144
Interest 429 446 445 452 481 473 500 520 1,772 1,975
Other Income 3 7 6 20 24 29 30 31 36 114
PBT before EO expense 252 247 590 732 359 348 636 635 1,822 1,978
Extra-Ord expense 48 0 0 0 0 0 0 0 48 0
PBT 204 247 590 732 359 348 636 635 1,774 1,978
Tax 71 56 106 143 87 86 160 160 377 493
Rate (%) 34.9 22.7 18.0 19.6 24.2 24.8 25.2 25.2 21.3 24.9
MI & P/L of Asso. Cos. -5 23 84 149 38 35 68 52 251 193
Reported PAT 138 168 400 440 235 226 408 423 1,146 1,292
Adj PAT 174 168 400 440 235 226 408 423 1,193 1,292
YoY Change (%) NA NA NA NA 34.5 35.1 2.0 -3.8 NA 8.2
Margins (%) 9.1 8.5 17.1 17.4 10.6 10.0 13.8 14.0 13.6 12.3

PI Industries
CMP INR3,475 | TP: INR4,300 (+24%)
 The CSM/domestic business is expected to grow ~7%/5%
YoY
 The demand scenario and product launches in the
domestic and CSM segments will be the key focus areas
Buy
EPS CHANGE (%): FY24|25: -5|-2
 EBITDA margins are likely to decline to ~25% from 25.7%
in 3QFY24 on the back of an increase in employee cost
 Any update on the Pharma Intermediate segment will be a
key monitorable

Quarterly Earning Model (INR m)

Y/E March FY23 FY24E FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
Net Sales 15,432 17,700 16,132 15,656 19,104 21,169 18,839 20,452 64,920 79,565
YoY Change (%) 29.3 30.7 18.9 12.2 23.8 19.6 16.8 30.6 22.5 22.6
Total Expenditure 11,976 13,381 11,981 12,228 14,426 15,655 14,134 15,730 49,566 59,945
EBITDA 3,456 4,319 4,151 3,428 4,678 5,514 4,705 4,722 15,354 19,620
Margins (%) 22.4 24.4 25.7 21.9 24.5 26.0 25.0 23.1 23.7 24.7
Depreciation 560 560 567 577 697 803 850 900 2,264 3,250
Interest 36 111 89 33 43 78 50 30 269 201
Other Income 241 317 502 495 469 469 420 420 1,555 1,778
PBT 3,101 3,965 3,997 3,313 4,407 5,102 4,225 4,212 14,376 17,947
Tax 516 629 484 519 625 317 718 716 2,148 2,376
Rate (%) 16.6 15.9 12.1 15.7 14.2 6.2 17.0 17.0 14.9 13.2
Minority Interest & Profit/Loss of Asso. Cos. -39 -12 -5 -12 -47 -20 -6 -13 -68 -86
Reported PAT 2,624 3,348 3,518 2,806 3,829 4,805 3,513 3,510 12,296 15,656
Adj PAT 2,624 3,348 3,518 2,806 3,829 4,805 3,513 3,510 12,296 15,656
YoY Change (%) 40.2 45.8 58.0 37.3 45.9 43.5 -0.2 25.1 45.7 27.3
Margins (%) 17.0 18.9 21.8 17.9 20.0 22.7 18.6 17.2 18.9 19.7

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PVR INOX Neutral

CMP: INR1,600 | TP: INR1495 (-7%) EPS CHANGE (%): FY24|25: 0|0
 Revenue could decline sequentially given the higher base of 2QFY24 EBITDA margins to decrease sequentially due to dip in revenue
 ATP could grow 10% YoY to INR268 on the back of healthy response
to big ticket movies
Consolidated quarterly earnings model (INR m)
Y/E March FY23E FY24E
FY23* FY24E
1Q* 2Q* 3Q 4Q 1Q 2Q 3Q 4Q
Net Sales 15,636 10,601 9,408 11,431 13,049 19,999 15,074 16,232 37,506 64,355
YoY Change (%) 2961.1 860.3 49.4 33.9 -16.5 88.7 60.2 42.0 182.1 71.6
Total Expenditure 12,513 10,655 8,124 11,378 12,241 15,723 13,240 14,026 34,304 55,230
EBITDA 3,123 -54 1,284 53 808 4,276 1,834 2,207 3,202 9,125
YoY Change (%) -340.9 -95.7 140.0 -85.4 -74.1 -8,018.5 42.8 4,063.7 -237.4 185.0
Depreciation 894 906 619 1,196 1,111 1,220 1,238 1,260 3,029 4,829
Interest 415 417 389 419 464 486 481 492 1,589 1,923
Other Income 260 217 128 216 195 197 195 193 684 780
PBT before EO expense 2,074 -1,160 404 -1,346 -572 2,767 310 648 -732 3,153
Extra-Ord expense 0 0 0 108 0 0 0 0 108 0
PBT 2,074 -1,160 404 -1,454 -572 2,767 310 648 -840 3,153
Tax 650 -376 152 1,402 -131 693 78 153 1589.0 793.6
Rate (%) 31.3 32.4 37.6 -96.4 22.9 25.0 25.2 23.7 -189.2 25.2
Reported PAT 1,424 -784 252 -2,856 -441 2,074 232 494 -2,429 2,359
Adj PAT 1,424 -784 252 2,074 -441 2,074 232 494 -566 2,359
YoY Change (%) -200.3 -50.9 -214.4 -1,286.7 -131.0 -364.5 -7.9 -76.2 -86.5 -516.8

SRF
CMP INR2,467 | TP: INR2,250 (-9%)
 Expect the Chemicals/Packaging/Technical Textiles
segment to grow/(decline) (18%)%/5%/8% YoY
 Commissioning and ramping up of Specialty Chemicals and
Fluorochemicals plants will be a key focus area
Neutral
EPS CHANGE (%): FY24|25: -5|-6
 The demand scenario and realizations for key chemicals
will be the key monitorables
 Any update on the demand-supply scenario of technical
textile and packaging business will be a key monitorable

Consolidated - Quarterly Earning Model (INR m)

Y/E March FY23 FY24E FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
Net Sales 38,947 37,278 34,697 37,781 33,384 31,774 32,741 40,728 1,48,703 1,38,626
YoY Change (%) 44.3 31.3 3.7 6.4 -14.3 -14.8 -5.6 7.8 19.6 -6.8
Total Expenditure 28,749 29,226 26,211 28,185 26,184 25,320 26,373 31,733 1,12,371 1,09,611
EBITDA 10,198 8,052 8,486 9,596 7,200 6,453 6,368 8,995 36,332 29,016
Margins (%) 26.2 21.6 24.5 25.4 21.6 20.3 19.4 22.1 24.4 20.9
Depreciation 1,307 1,393 1,507 1,546 1,566 1,612 1,700 1,770 5,753 6,648
Interest 325 445 620 659 656 793 770 740 2,048 2,959
Other Income 99 327 100 223 118 291 110 309 749 828
PBT before EO expense 8,665 6,542 6,460 7,614 5,095 4,339 4,008 6,794 29,280 20,236
Extra-Ord expense & DO 249 361 150 280 237 191 0 0 1,040 428
PBT 8,416 6,181 6,309 7,334 4,858 4,148 4,008 6,794 28,240 19,807
Tax 2,336 1,371 1,200 1,709 1,265 1,140 981 1,663 6,617 5,050
Rate (%) 27.0 21.0 18.6 22.5 24.8 26.3 24.5 24.5 22.6 25.0
Reported PAT 6,080 4,810 5,109 5,625 3,593 3,008 3,026 5,131 21,623 14,758
Adj PAT 6,329 5,171 5,259 5,905 3,830 3,199 3,026 5,131 22,663 15,186
YoY Change (%) 63.1 42.9 11.4 -0.6 -39.5 -38.1 -42.5 -13.1 24.8 -33.0
Margins (%) 16.2 13.9 15.2 15.6 11.5 10.1 9.2 12.6 15.2 11.0

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Tata Chemicals Neutral

CMP INR1,118 | TP: INR1,060 (-5%) EPS CHANGE (%): FY24|25: -4|-2
 Revenue is likely to decline 7% YoY on the back of  EBITDA is expected to decline ~10%/27%/67% YoY in
~41%/20% decline in Kenya/Europe India/Europe/Kenya
 The current demand scenario in Soda Ash in TTCH’s key  The pricing outlook on Soda Ash and contract renewal in
markets is a focus area TCNA will be the key monitorable

Consolidated - Quarterly Earning (INR m)

Y/E March FY23 FY24 FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
Net Sales 39,950 42,390 41,480 44,070 42,180 39,980 38,207 37,245 1,67,890 1,57,612
YoY Change (%) 34.2 40.2 32.0 26.6 5.6 -5.7 -7.9 -15.5 33.0 -6.1
Total Expenditure 29,800 33,190 32,260 34,420 31,750 31,790 30,533 29,944 1,29,670 1,24,017
EBITDA 10,150 9,200 9,220 9,650 10,430 8,190 7,674 7,301 38,220 33,595
Margins (%) 25.4 21.7 22.2 21.9 24.7 20.5 20.1 19.6 22.8 21.3
Depreciation 2,130 2,180 2,270 2,340 2,290 2,340 2,360 2,374 8,920 9,364
Interest 800 860 1,070 1,330 1,230 1,450 1,400 1,200 4,060 5,280
Other Income 460 600 370 750 490 850 368 745 2,180 2,453
PBT before EO expense 7,680 6,760 6,250 6,730 7,400 5,250 4,282 4,472 27,420 21,404
Extra-Ord expense 40 50 70 20 -90 -1,020 0 0 180 -1,110
PBT 7,640 6,710 6,180 6,710 7,490 6,270 4,282 4,472 27,240 22,514
Tax 1,560 380 1,020 -80 1,710 1,200 1,049 1,096 2,880 5,055
Rate (%) 20.4 5.7 16.5 -1.2 22.8 19.1 24.5 24.5 10.6 22.5
MI & Profit/Loss of Asso. Cos. 190 50 1,250 -300 460 790 755 -15 1,190 1,990
Reported PAT 5,890 6,280 3,910 7,090 5,320 4,280 2,478 3,391 23,170 15,469
Adj PAT 5,930 6,330 3,980 7,110 5,230 3,515 2,478 3,391 23,350 14,359
YoY Change (%) 105.9 198.9 32.2 53.6 -11.8 -44.5 -37.7 -52.3 84.8 -38.5
Margins (%) 14.8 14.9 9.6 16.1 12.4 8.8 6.5 9.1 13.9 9.1

UPL Neutral
CMP INR592| TP: INR600 (+1%) EPS CHANGE (%): FY24|25: -72|-42
 All the key geographies are expected to witness a YoY  The price trend in raw materials, debt levels, and capex
decline in revenue plans are the key monitorables
 Revenue/EBITDA are expected to decline 26.5%/66% YoY  Global demand-supply scenario will be a key monitorable

Cons.: Quarterly Earning (INR b)

Y/E March FY23 FY24 FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
Net Sales 108.2 125.1 136.8 165.7 89.6 101.7 100.6 148.4 535.8 440.3
YoY Change (%) 27.1 18.4 21.1 4.5 -17.2 -18.7 -26.5 -10.5 15.9 -17.8
Total Expenditure 84.8 97.4 106.5 135.5 73.7 86.0 90.3 127.0 424.2 376.9
EBITDA 23.4 27.7 30.3 30.2 15.9 15.8 10.3 21.4 111.6 63.4
Margins (%) 21.7 22.1 22.2 18.2 17.8 15.5 10.3 14.4 20.8 14.4
Depreciation 5.9 6.1 6.2 7.3 6.4 6.6 7.1 7.3 25.5 27.3
Interest 5.2 6.4 8.9 9.1 7.0 8.7 8.0 7.5 29.6 31.2
Other Income 0.7 0.8 1.2 2.1 1.0 1.1 1.2 1.3 4.8 4.5
Exch. difference on trade rec./payable 2.0 3.2 1.5 2.9 3.2 2.5 0.0 0.0 9.6 5.7
PBT before EO expense 11.1 12.7 14.8 13.0 0.4 -1.0 -3.6 7.8 51.6 3.7
Extra-Ord expense 0.8 0.4 0.2 0.3 0.4 0.9 0.0 0.0 1.7 1.3
PBT 10.3 12.3 14.6 12.7 0.0 -1.9 -3.6 7.8 49.9 2.4
Tax 0.6 2.3 1.4 3.1 -1.6 -1.0 -0.6 1.4 7.4 -1.8
Rate (%) 5.7 18.8 9.2 24.5 3,280.0 51.9 18.0 18.0 14.7 -77.2
MI & P/L of Asso. Cos. 1.0 1.8 2.4 1.7 -0.1 1.0 -2.4 0.4 6.9 -1.0
Reported PAT 8.8 8.1 10.9 7.9 1.7 -1.9 -0.6 6.0 35.7 5.2
Adj PAT 10.4 10.5 13.4 10.5 4.0 1.1 -0.6 6.0 44.7 10.5
YoY Change (%) 2.9 40.3 11.1 -44.6 -61.7 -89.8 -104.2 -42.4 -7.8 -76.5
Margins (%) 9.7 8.4 9.8 6.3 4.5 1.0 -0.6 4.1 8.4 2.4

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 December 2023 Results Preview | Sector: Others

Quess Neutral
CMP INR519| TP: INR560 (+8%) EPS CHANGE (%): FY24|25: -6.1|-5.6
 Expect to grow sequentially and at 12.7% YoY in 3QFY24.  Commentary on margins to be a key monitorable.
 Margin recovery to remain gradual, margins to stay largely
flat QoQ.
Consolidated quarterly performance (INR m)
Y/E March FY23 FY24E FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
Net Sales 39,793 42,733 44,656 44,402 46,002 47,483 50,316 52,416 1,71,584 1,96,217
Change (YoY %) 33.2 32.4 21.2 17.1 15.6 11.1 12.7 18.0 25.3 14.4
Total Expenditure 38,259 41,386 43,200 42,882 44,463 45,848 48,505 50,371 1,65,726 1,89,187
EBITDA 1,534 1,347 1,456 1,520 1,539 1,635 1,811 2,044 5,858 7,030
Margin (%) 3.9 3.2 3.3 3.4 3.3 3.4 3.6 3.9 3.4 3.6
Depreciation 610 676 695 765 686 697 682 682 2,746 2,747
EBIT 924 671 761 756 853 939 1,129 1,362 3,112 4,283
Margin (%) 2.3 1.6 1.7 1.7 1.9 2.0 2.2 2.6 1.8 2.2
Interest 204 263 290 309 272 281 263 263 1,066 1,079
Other Income 72 88 67 36 41 151 149 149 263 491
PBT before EO expense 792 496 538 483 621 809 1,015 1,248 2,309 3,694
Recurring Tax 115 100 217 183 140 83 152 187 615 563
Rate (%) 14.6 20.1 40.3 37.9 22.6 10.3 15.0 15.0 26.6 15.2
MI and P/L of Asso. Cos. 64 -24 -24 -31 3 -10 0 0 -16 -7
Adjusted PAT 613 421 345 331 478 735 863 1,061 1,710 3,137
Extraordinary items 0 0 -535 0 0 16 0 0 -535 16
Reported PAT 613 421 880 331 478 719 863 1,061 2,245 3,122
Change (YoY %) 32.7 12.0 5.0 -55.0 -22.0 71.0 -1.9 220.3 -6.9 39.0
Margin (%) 1.5 1.0 2.0 0.7 1.0 1.5 1.7 2.0 1.3 1.6

SIS Buy
CMP INR465| TP: INR530 (+14%) EPS CHANGE (%): FY24|25: 0.0|0.0
 Expect double-digit YoY growth to continue in 3QFY24.  The outlook on margin is a key monitorable.
 Margin recovery to remain gradual, margins to stay largely
flat QoQ.
Consolidated quarterly performance (INR m)
Y/E March FY23 FY24E FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
Gross Sales 26,782 27,677 29,043 29,957 29,767 30,736 32,108 34,032 1,13,458 1,26,643
Change (YoY %) 12.6 13.9 11.7 13.1 11.1 11.1 10.6 13.6 12.8 11.6
Total Expenditure 25,575 26,579 27,779 28,610 28,377 29,292 30,560 32,304 1,08,543 1,20,532
EBITDA 1,207 1,098 1,264 1,347 1,390 1,445 1,548 1,728 4,915 6,111
Margin (%) 4.5 4.0 4.4 4.5 4.7 4.7 4.8 5.1 4.3 4.8
Depreciation 286 331 342 388 358 404 415 434 1,347 1,611
Interest 247 275 310 317 327 347 250 242 1,149 1,166
Other Income 67 81 30 149 88 125 120 117 327 450
PBT 742 572 642 791 793 819 1,003 1,169 2,747 3,784
Tax -80 -80 -379 -77 -50 132 50 58 -616 191
Rate (%) -10.7 -14.1 -59.0 -9.7 -6.2 16.1 5.0 5.0 -22.4 5.0
Minority Interest and P/L of Asso. Cos. 4 22 13 64 52 66 37 42 102 197
Adjusted PAT 825 674 1,034 931 895 753 989 1,153 3,465 3,790
Change (YoY %) 59.0 7.7 35.5 -4.4 8.4 11.6 -4.3 23.8 20.2 9.4
Margin (%) 3.1 2.4 3.6 3.1 3.0 2.4 3.1 3.4 3.1 3.0

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TeamLease Buy
CMP INR3254 | TP: INR3678 (+13%) EPS CHANGE (%): FY24|25: -8.2|-3.8
 Expect 17% YoY growth in 3QFY24. DA is likely to remain  Margin is expected to be flat QoQ in 3QFY24, while
flat or marginally positive. HR Tech to see a flat QoQ specialized staffing margin would be up QoQ.
growth.  IT hiring and margin recovery should be closely
monitored.
Consolidated quarterly performance (INR m)
FY23 FY24E FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
Revenue 18,794 19,551 20,083 20,273 21,716 22,726 23,517 24,125 78,700 92,083
Change (YoY %) 37% 28% 14% 12% 16% 16% 17% 19% 21% 17%
Total Expenditure 18,541 19,234 19,767 19,936 21,453 22,409 23,188 23,714 77,477 90,763
Reported EBITDA 253 317 316 337 263 318 329 410 1,223 1,320
Margin (%) 1.3% 1.6% 1.6% 1.7% 1.2% 1.4% 1.4% 1.7% 1.6% 1.4%
Reported EBIT 163 216 203 209 138 188 219 300 791 846
Margin (%) 0.9% 1.1% 1.0% 1.0% 0.6% 0.8% 0.9% 1.2% 1.0% 0.9%
Interest 7 12 17 21 21 25 20 20 57 85
Other Income 123 118 100 99 140 130 100 120 439 490
PBT before EO expense 279 322 286 287 258 294 299 400 1,174 1,251
Extra-Ord. expense 0 0 0 23 0 0 0 0 23 0
Reported PBT 279 322 286 264 258 294 299 400 1,150 1,251
Tax 14 5 -4 20 1 18 12 16 35 46
Rate (%) 5% 2% -1% 8% 0% 6% 4% 4% 3% 4%
Reported PAT 265 316 290 244 258 276 287 384 1,115 1,205
Change (YoY %) -1% -164% -4% -23% -3% -13% -1% 58% 183% 8%
Margin (%) 1.4% 1.6% 1.4% 1.2% 1.2% 1.2% 1.2% 1.6% 1.4% 1.3%
Adjusted PAT 265 316 290 267 258 276 287 384 1,139 1,205
Change (YoY %) 9% 23% -4% -14% -3% -13% -1% 44% 2% 6%
Margin (%) 1.4% 1.6% 1.4% 1.3% 1.2% 1.2% 1.2% 1.6% 1.4% 1.3%

Voltas Buy
CMP INR978 | TP: INR1,150 (+18%) EPS CHANGE (%): FY24|25: -- |--
 Estimate revenue to grow 21% YoY in 3QFY24.  EBITDA is estimated to grow 48% YoY to INR1.13b.
 Revenues from UCP/EMPS/PES are estimated to increase  OPM is estimated to increase 84bp YoY to 4.6%
14%/38%/3% YoY. supported by positive operating leverage.
Consolidated - Quarterly Earning Model (INR m)
Y/E March FY23 FY24 FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
Net Sales 27,680 17,684 20,056 29,568 33,599 22,928 24,321 36,019 94,988 1,16,866
YoY Change (%) 55.1 4.7 11.8 10.9 21.4 29.7 21.3 21.8 19.7 23.0
EBITDA 1,770 1,008 764 2,182 1,854 703 1,129 2,715 5,724 6,401
YoY Change (%) 30.4 (21.9) (50.9) (16.4) 4.7 (30.3) 47.9 24.5 -16.0 11.8
Margins (%) 6.4 5.7 3.8 7.4 5.5 3.1 4.6 7.5 6.0 5.5
Depreciation 85 97 111 104 113 117 120 146 396 496
Interest 40 67 64 124 101 115 100 104 296 420
Other Income 268 644 307 467 700 710 613 514 1,685 2,536
Extra-ordinary items - (1,064) (1,374) - 0 - - - -2,438 0
PBT 1,913 423 (478) 2,420 2,339 1,181 1,523 2,979 4,278 8,022
Tax 508 195 300 706 735 493 384 407 1,709 2,019
Rate (%) 26.6 13.1 33.5 29.2 31.4 41.7 25.2 13.7 25.4 25.2
Share of profit of associates/JV's (316) (303) (325) (275) (312) (321) (325) (155) (1,219) (1,113)
Reported PAT 1,089 (74) (1,104) 1,439 1,293 367 814 2,416 1,350 4,889
YoY Change (%) (10.6) (107.2) (215.0) (21.2) 18.7 NM (173.7) 67.9 -73.2 262.2
Adj PAT 1,089 990 270 1,439 1,293 367 814 2,416 3,788 4,889
YoY Change (%) (10.6) (4.5) (71.8) (21.2) 18.7 (62.9) 201.0 67.9 -24.8 29.1

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 December 2023 Results Preview | Sector: Others

ZEE Entertainment Buy

CMP: INR285 | TP: INR310 (9%) EPS CHANGE (%): FY24|25: 0|0
 Ad revenues expected to decline by 4% YoY  EBITDA margin is expected to remain muted on the back of higher
opex and investment in digital segment
 Overall revenue to decrease marginally as Ad revenue decline could
be offset by subscription revenue growth
Consolidated quarterly earnings model (INR m)
Y/E March FY23 FY24E FY23
FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q
Revenue 18,457 20,213 21,088 21,121 19,838 24,378 20,806 21,604 80,879 86,626
YoY Change (%) 4.0 2.1 -0.2 -9.0 7.5 20.6 -1.3 2.3 -1.2 7.1
Total Expenditure 16,100 16,737 17,427 19,604 18,289 21,050 18,680 19,110 69,868 77,129
EBITDA 2,358 3,476 3,660 1,517 1,549 3,328 2,126 2,494 11,011 9,497
EBITDA Margin (%) 12.8% 17.2% 17.4% 7.2% 7.8% 13.6% 10.2% 11.5% 13.6% 11.0%
Depreciation 778 679 837 833 785 772 780 783 3,128 3,120
Interest 81 95 130 396 234 234 240 251 702 959
Other Income 338 169 148 142 145 718 140 148 797 1,150
Fair Value through P&L gain/(loss) 0 0 58 0 38 0 58 38
PBT before EO expense 1,837 2,871 2,900 430 713 3,039 1,246 1,608 8,037 6,606
Extra-Ord expense 150 615 1,690 900 706 1,198 0 0 3,355 1,904
PBT 1,687 2,255 1,210 -470 6 1,842 1,246 1,608 4,682 4,702
Tax 621 648 637 260 -31 544 311 360 2,167 1,184
Rate (%) 36.8 28.7 52.7 -55.3 -480.0 29.5 25.0 22.4 46.3 25.2
MI & P/L of Asso. Cos. -1 1 2 -1 -1 -1 0 0 1 -2
Reported PAT 1,066 1,606 570 -729 39 1,299 934 1,249 2,514 3,520
Adj PAT 1,161 1,426 1,312 669 496 1,726 934 1,749 4,568 4,905
YoY Change (%) -47 -50 -58 -77 -57 21 -29 162 -59 7

Zomato Buy
CMP INR125| TP: INR145 (+16%) EPS CHANGE (%): FY24|25: 0.0|0.0
 Overall, the sequential growth is expected to see some  EBITDA margin should see an uptick and likely to turn
moderation from peak. Food delivery should grow slower. positive at 0.6%.
 For Blinkit, traction is likely to continue in 3QFY24.  Watch out for the outlook on growth, margin
Hyperpure should also continue its growth momentum. sustainability and Blinkit.
Consolidated - Quarterly Earning Model (INR M)
Y/E march FY23 FY24E FY23 FY24E
1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QE
Revenue (net of delivery) 14,139 16,613 19,482 20,560 24,160 28,480 30,860 33,347 70,794 1,16,846
YoY Change (%) 67.4 62.2 75.2 69.7 70.9 71.4 58.4 62.2 68.9 65.1
Inventory of traded goods 2,538 3,123 3,900 4,391 5,620 6,740 7,098 7,602 13,952 27,059
Employee Expenses 3,489 3,813 3,950 3,398 3,380 4,170 4,197 4,498 14,650 16,245
Delivery expenses 5,724 5,903 6,549 7,193 8,100 9,190 9,983 10,580 25,369 37,853
Gross Profit 2,388 3,774 5,083 5,578 7,060 8,380 9,583 10,667 16,823 35,689
Margins (%) 16.9 22.7 26.1 27.1 29.2 29.4 31.1 32.0 23.8 30.5
Advertisement and sales promotion 2,776 2,997 3,479 3,022 3,140 3,550 3,857 4,058 12,274 14,606
Others 2,685 3,891 5,266 4,810 4,400 5,300 5,555 6,011 16,652 21,266
EBITDA -3,073 -3,114 -3,662 -2,254 -480 -470 170 597 -12,103 -183
Margins (%) -21.7 -18.7 -18.8 -11.0 -2.0 -1.7 0.6 1.8 -17.1 -0.2
Depreciation 416 1,067 1,548 1,338 1,300 1,280 1,389 1,406 4,369 5,375
Interest 49 119 161 158 180 160 160 160 487 660
Other Income 1,678 1,695 1,734 1,705 1,810 2,120 2,162 2,206 6,812 8,298
PBT before EO expense -1,860 -2,605 -3,637 -2,045 -150 210 784 1,237 -10,147 2,080
Extra-Ord expense 0 0 0 1 0 0 0 0 1 0
PBT -1,860 -2,605 -3,637 -2,044 -150 210 784 1,237 -10,146 2,080
Tax 0 -97 -171 -168 -170 -150 0 0 -436 -320
Rate (%) 0.0 3.7 4.7 8.2 113.3 -71.4 NA 0.0 4.3 NA
Minority Interest & Profit/Loss of Asso. Cos. -3 0 0 6 0 0 0 0 3 0
Reported PAT -1,857 -2,508 -3,466 -1,882 20 360 784 1,237 -9,713 2,400
Adj PAT -1,857 -2,508 -3,466 -1,883 20 360 784 1,237 -9,714 2,400
YoY Change (%) -45.4 -42.3 -8.5 -46.5 -101.1 -114.4 -122.6 -165.7 -35.5 -124.7
Margins (%) -13.1 -15.1 -17.8 -9.2 0.1 1.3 2.5 3.7 -13.7 2.1

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 December 2023 Results Preview

NOTES

January 2024 255

Motilal Oswal India Strategy Gallery
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Registration details of group entities.: Motilal Oswal Financial Services Ltd. (MOFSL): INZ000158836 (BSE/NSE/MCX/NCDEX); CDSL and NSDL: IN-DP-16-2015; Research Analyst: INH000000412 .
AMFI: ARN .: 146822. IRDA Corporate Agent – CA0579. Motilal Oswal Financial Services Ltd. is a distributor of Mutual Funds, PMS, Fixed Deposit, Insurance, Bond, NCDs and IPO products.

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